Another rate rise before Christmas would hurt the economy and be particularly damaging to retailers, the Australian National Retailers Association (ANRA) warns.
The Reserve Bank yesterday lifted the official interest rate by 25 basis points to 3.5 percent, the second consecutive rate rise in the last two months.
According to ANRA CEO Margy Osmond, another rate rise would lead to a cut in discretionary spending.
“We have a long way to go before the retail sector is back to normal and consumers are sensitive to rate rises,” she said.
Osmond said a survey conducted by the ANRA of 1,000 women in September, found that one in two women with mortgages will cut their discretionary spending now that the RBA has lifted rates again. Over half of those women surveyed said they would cut back on entertainment including movies and dining out (55 percent), while 13 percent said they would cut back on household furniture, and 12 percent indicated a cut in spending on cosmetic and beauty products.
“Retailers are relying on the fundamentals of the economy. With unemployment and interest rates forecast to continue to climb, the outlook for the retail sector is pretty rocky for the next 18 months at least,” Osmond said.