Business still hoping for Nov rate cut

BUSINESS groups are still hopeful the central bank will cut the cash rate again in November, despite a bigger than expected jump in inflation. 

 

Retailers took heart from the fact the annual consumer price index at two per cent is at the lower end of the Reserve Bank of Australia's (RBA) target band, even though it jumped 1.4 per cent in the September quarter.

Australian National Retailers Association chief Margy Osmond says there's still room to drop the official interest rate further.

"Retailers will want to see the cash rate continue down before Christmas," she said in a statement.

"The RBA set Christmas off and racing with the cash rate drop at the start of the month. We hope to see the theme continue come Melbourne Cup Day."

The RBA's November board meeting often coincides with the "race that stop a nation".

The Australian Chamber of Commerce and Industry said while the inflation figures were higher than expectations, the broad economic climate, and the conditions on the ground for small and medium enterprises, demanded further consideration be given to a rate reduction.

The chamber's director of economics and industry policy, Greg Evans, said annual underlying inflation - which smooths out volatile price swings - at 2.5 per cent was also consistent with the RBA's forecast by the end of 2012.

"With the outlook for the global economy deteriorating and having prompted a sharp correction in bulk commodity prices, there remains a compelling case for another rate cut," Mr Evans said.

"Sluggish employment growth and the upward trend in the unemployment rate, also highlight the need for additional interest rate relief."

New government data also released on Wednesday showed that job advertisements on the internet tumbled 7.7 per cent in September to their lowest level in nearly seven years.

Source  http://www.theaustralian.com.au/news/breaking-news/business-still-hoping-for-nov-rate-cut/story-fn3dxiwe-1226502567793