RBA slammed for halting sales growth

The Reserve Bank (RBA) has been criticised for dampening consumer sentiment with its latest interest rate hike just as spending was beginning to pick up.

According to the Australian, retailers are united in their anger at the central bank for increasing the official cash rate to 4.75 per cent on November 2nd.

One anonymous "big retailer" was quoted as telling the newspaper: "The RBA has clearly gone way outside its charter in continuing to raise rates in the face of clear evidence of a sharp decline in consumer confidence."

Meanwhile, another suggested that while the RBA once took regular soundings of "the real economy", these have now stopped and "the academics are running the show".

The Australian commented that although the current official rate is well below the 7.25 per cent level of March 2008, seven rate hikes in just over a year have had a cumulative impact on consumer sentiment.

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