RBA rate cut a Christmas gift

NATIONAL: Peak retail industry body the Australian Retailers Association (ARA) is claiming the Reserve Bank of Australia (RBA)'s decision to cut the cash rate by one percentage point as welcome news for retailers. ARA executive director Richard Evans said the second cut in two months was great news for consumers, adding the effects should lead to a turn in consumer sentiment in time for Christmas.

Regardless of whether banks passed on the interest rate cut, the RBA's decision, announced on October 7, was "a very strong sign that our leading financial regulators believe the underlying foundations of the Australian economy are strong," he said.

"Despite unstable global economic conditions, Australia is weathering the storm from overseas. This will help turn consumer confidence around and start the upwards trend for consumer spending after successive months of stagnant and declining growth. This is great news for consumers and even better news for retailers hard hit by months of reduced consumer demand."