September cut in interest rates 'increasingly unlikely'
Improvements in retail sales figures and business investment plans have given weight to forecasts that the Reserve Bank of Australia is unlikely to increase interest rates at the next meeting of the board.
This is according to Michael Blythe, chief economist at the Commonwealth Bank of Australia, who asserted that in the medium term, rates will have to be increased, reports Reuters.
The debt futures market fell recently based on the rising retail sales figures published by the Australian Bureau of Statistics (ABS).
According to the ABS data, there was a 0.5 per cent increase in turnover in July and an increase of 0.6 percentage points month-on-month.
"There's nothing here that adds to the rate-cut case which is doing the rounds of markets," Mr Blythe asserted, adding that the strength of the dollar also make a reduction unlikely.
Among the retail sectors to enjoy particularly strong turnover in July were cafes, restaurants and takeaway food services, and department stores, which rose 1.1 per cent and 1.2 per cent respectively.
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