Retail sales in April grew at their slowest pace in nine months despite a slight pick up during the month, a survey finds.
The Commonwealth Bank Business Sales Indicator rose by 0.2 per cent in April for an annual pace of 4.6 per cent in April, its slowest pace of growth since August 2009.
The index tracks the value of credit and debit card transactions processed through Commonwealth Bank point-of-sale terminals,
Commonwealth Bank executive general manager of local business banking Symon Brewis-Weston said the sluggish data indicated spending by consumers and businesses had been affected by rising interest rates.
"Spending is growing, but very modestly," Mr Brewis-Weston said in a statement.
"It's further evidence that consumers are being impacted by increases in interest rates, preferring to play it safe when it comes to opening their wallets," he said.
The Reserve Bank of Australia lifted the cash rate six times between October last year and May, to its current 4.5 per cent.
Of the 20 industries tracked in the BSI, spending was strongest in the mail order and telephone order providers industry, increasing 1.1 per cent in trend terms over April.
Mr Brewis-Weston predicted RBA would hold the cash rate steady in June."This is supported by the latest spending data, which indicates that now would be a good time for the Reserve Bank to take a rest in its rate hiking cycle as consumers are feeling the pinch of recent rate hikes," he said.
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