By Keri Algar
SYDNEY, NSW: The anticipated hold on interest rates was well received by consumers and retailers alike, although executives like Terry Smart approach the future with reservation.
The Reserve Bank kept rates on hold at 4.5 per cent for the third month straight after a soft consumer price index rise of 3.5 per cent was announced last week.
While economists forecast a rise in rates before the end of the year, speculation on the street is on whether the major banks will increase borrowing costs irrespective of the central bank.
JB Hi-Fi CEO, Terry Smart, said it is difficult to know if the major banks will raise interest rates independently of the Reserve Bank.
“That’s a hard one to answer. We thought they would in the past, and then they have. Though I’d like to think that they won’t be rising,” said Smart to Current.com.au.
“Discretionary spending, obviously, is fairly tight at the moment. It’s good to see the Reserve Bank holding interest rates and hopefully this will provide a bit of stability.”
For the meantime, however, retailers hope the rate hold will encourage discretionary spending.
“It’s a positive for retailers, and there’s no doubt families need to see some stabilisation with interest rates.”