Ongoing sales have boosted spending during a cost-of-living crisis. Will shoppers pay the price with an interest rate rise?

Australia's struggling retail sector has been given a glimmer of hope, with rolling sales encouraging shoppers to spend — but economists warn that it may come with the price of another interest rate hike by the Reserve Bank.

The recent jump in retail spending, boosted by clothing and footwear retailers offering big discounts and earlier-than-usual sales seasons, has increased expectations of an interest rate hike in August as the entire retail sector navigates a cost-of-living crunch.

Official figures released by the Australian Bureau of Statistics last week showed retail spending rose by 0.6 per cent in May, while spending only increased by 1.7 per cent for the year.

To know more: https://www.abc.net.au/news/2024-07-09/retail-sales-consumer-spending-inflation-interest-rates-risks/104071272