Retail sales lift boosts case for rates hold
Retail sales lift boosts case for rates hold

The Reserve Bank has a new reason to hold interest rates steady with new figures showing a solid pick-up in retail sales.

The Australian Bureau of Statistics reported sales were up by 0.5 per cent through October.

WA led the way nationally with a 1.2 per cent jump.

But sales were up across every State and Territory, the first time since June when shoppers were cashed-up with carbon tax compensation.

Shoppers spent up on household goods with the value of sales rising by 1.2 per cent.

There was also a 0.6 per cent increase in food retailing, the single largest sector, while cafes and restaurants were up by 0.5 per cent.

Sales of clothing and footwear dropped by 0.6 per cent while those through department stores edged down by 0.5 per cent.

The figures followed the release of new figures showing only a small pick-up in consumer prices through October.

The TD Securities-Melbourne Institute inflation gauge rose by 0.1 per cent in October to be 2.4 per cent higher over the past year.

Communication, newspapers, books and stationery and domestic holiday travel and accommodation costs were all higher through October.

However, they were offset by falls in the prices of fruit, vegetables, bread, audio, visual and computing equipment.

Fruit and vegetable prices dropped by 4.6 per cent alone in October after climbing through August and September due to poor weather conditions in key growing regions.

TD senior analyst Annette Beacher said the Reserve Bank board, which meets tomorrow, was not under pressure to cut interest rates.

"Combined with stability in global markets, a bounce in iron ore prices and better activity and survey data from number one trading partner China in recent weeks, adds to the case for "wait and see" for the RBA board meeting tomorrow," she said.

The West Australian

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