RBA holds rates following weak retail results

By Keri Algar

SYDNEY, NSW: Retail trade has slackened by 0.4 per cent compared to prior months and the latest Retail Figures show Australians are not as hungry for consumer electronics as they are for eating out, according to results released yesterday by the Australian Bureau of Statistics (ABS).

Household goods retailing and department stores registered incremental growth of 0.5 per cent and 0.6 per cent respectively, while cafe and restaurant services enjoyed three times this growth, recording the greatest increase in retail trade (1.5 per cent).

Sales increased 0.3 per cent in August, seasonally adjusted, compared with an increase of 0.7 per cent the previous month.

Meanwhile, the Reserved Bank announced it would hold its key cash rate at 4.5 per cent for the fifth month running, reflecting future economic uncertainty.

Recent economic growth and public spending have been prominent but will probably ease back as global financial markets are characterised by uncertainty, according to Glen Stevens, RBA Governor.

“If economic conditions evolve as the Board currently expects, it is likely that higher interest rates will be required, at some point, to ensure that inflation remains consistent with the medium-term target,” said Stevens.

The total trend turnover increased 0.5 per cent in August, according to the ABS figures, while in the twelve months to August trend turnover increased 3.9 per cent, compared with 5.3 per cent in August 2009.

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