Retail figures 'suggest RBA will keep interest rates on hold'

The latest retail data from the Australian Bureau of Statistics has revealed that in August there was a 0.6 per cent increase in turnover in the sector compared with the month before.

Chief economist for UBS in Sydney Scott Haslem told the Australian the latest information makes it more likely that the Reserve Bank of Australia (RBA) will maintain interest rates at their current rate for the rest of the year.

Yesterday, the central bank announced that there would be no change this month, marking the 12th consecutive month in which it decided not to alter the cash rate.

"Today's data – after yesterday's jump in exports and building approvals – add weight to the case that the RBA is more likely to remain on hold this year," Mr Haslem stated.

In light of the latest figures it may be less likely that the bank will cut rates as the RBA might be less concerned that a slip in spending will have an adverse impact on the economy.

When the latest monetary policy statement was released, governor Glenn Stevens suggested that the uncertainty in the global financial markets and Europe's sovereign debt problems contributed to the decision.

Get more information on the latest Reserve Bank interest rates with Mozo.