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ISCOVER
Staff Reporter
Soft consumer spending may force the Reserve Bank of Australia to revise its aggressive stance on monetary policy.
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According to National Australia Bank’s latest monthly business survey, conditions in retail fell to worryingly low levels, while manufacturing, construction and wholesale were also poor.
NAB group chief economist Alan Oster said the severe weakness in retail could force the RBA to push its next rate hike back until December.
“We expect the next 25 basis point rise in the cash rate to be deferred until December, when growth momentum becomes more apparent and the labour markets tightens significantly,” Mr Oster said.
“The final 25 basis point rate hike is expected to be pushed back until May 2012.”
