Yuletide interest rate present for retailers

DANDENONG retailers are set to benefit this Christmas from a 2006 interest rate holdoff.
Recently the Reserve Bank of Australia voted to keep the official cash rate on hold at 5.5 per cent, keeping interest rates at bay.
The Dandenong Chamber of Commerce president David Carlson said this would please retailers and those who benefit from Christmas consumer spending.
“All but the newest of businesses would have experienced the increases in the interest rates over the last number of years and I don’t believe future increases will come as a surprise to any of those businesses,” he said.
“Smaller businesses, particularly retailers may well appreciate the fact that customers will not have higher interest costs before Christmas spending.”
Mr Carlson said interest rates affected general business in the long term more than the short term.
“The impact on businesses is more long term, that is, identifying if the increased cost of borrowing can be passed on to customers to reduce any further erosion in business profits which may well already be squeezed by competition or bureaucracy.”
But ultimately, Mr Carlson said he believed big business in Dandenong would not be drastically affected.
“Historically, interest rates have been increased to encourage saving and this combined with making it more expensive to borrow provide less incentive to spend which would appear to reduce business spending.
“Given the growth being experienced within Dandenong, I believe any small increase in interest rates, deferred or not, will have minimal impact on the larger businesses.”