Sales Have Caused Bigger Spending Spree

Due to shoppers feeling more confident about spending, another interest rate rise seems to be on the cards.

Retail trade figures released for November have shown a 7 per cent rise over the year, due to the major stores having their sales, but for the smaller stores sales fell for the month of November.

The latest sales figures showed that people were spending money on clothes, electrical goods and alcohol.

Due to the higher sales figures it seems more than likely that the Reserve Bank will lift interest rates again in February, but the Reserve Bank will need to take into account the fact that the smaller retail outlets have been finding it harder and that the higher sales figures in November came after a five month period of low sales figures.

Some retailers feel that the sales figures will show that consumers did their Christmas shopping earlier to take advantage of the sales and that December's figures will be a lot lower.

Gary Black the National Retailers Association Chief Executive stated that the figures were a surprise, as the feedback that he had obtained from the industry in the days before Christmas indicated that it was to be the worst December in 25 years.

Mr. Black further stated that he was concerned that because the Reserve Bank would not get the December retail figures before they met on February the 2nd they might lift interest rates without knowing the true bleaker Christmas picture.

Michael Blythe from Commonwealth Bank stated that he expected the RBA to lift the cash rate to 4.25 per cent in February.

BT Financial's Chris Caton felt that a February rate rise was most likely, but that there could still be a change as the job figures were due to be released this week.

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Published on January 1-th, 2010 in Home Loans
Damon Rasheed is the CEO of Rate Detective, an Australian financial service comparison sites specialising in Life Insurance, Income Protection Insurance and home loans. Damon holds a Master's Degree in Economics from the University of Melbourne and has been involved in many start-up internet businesses.
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