Rates hold to hurt business

IT'S that time of the month when mortgagees, credit card holders and others in debt watch anxiously to see if the Reserve Bank of Australia changes the rate.

The RBA's decision to keep the cash rate on hold at 4.25% will be good for people in debt, but not so much for businesses.

Capricorn Investment Partners financial advisor Justin Baiocchi said people were still carrying a fair bit of debt, leaving less demand for services or goods.

"If they are not getting relief from the Reserve Bank, they are forced to cut their spending," he said.

The last rate cut was in December and it was cut by 25 basis points.

"Consumer confidence is at a very low level," Mr Baiocchi said.

"That also translates into less demand for goods or services."

He said businesses in small towns would be struggling as a result.

Mr Baiocchi said there were some controversial comments against the RBA's decision.

"The RBA is of the view that the resource boom is more than offsetting the weakness in the rest of the economy," he said.

Mr Baiocchi said comments included the boom's benefits were not widespread, but concentrated.

He said even within those concentrated areas, the money wasn't necessarily translated to more money being on groceries.

"Certain people are doing very well because they are on high money," Mr Baiocchi said. "And some businesses are doing well. But it's not necessarily filtering down to the average Joe."

He said he did not think big banks would go against the RBA's rate hold this month.

Topics:  business interest rates rba

Stay Connected

Update your news preferences and get the latest news delivered to your inbox.

Snitz sizzles to win qualifier with ease

IN FULL FLIGHT: Brisbane jockey Robbie Fradd streaks clear to win the $150,000 NRRA Country Championships qualifier on board Snitz, trained by Matt Dunn, at Clarence River Jockey Club.

SHORT priced favourite sends everybody home happy.

Ballina Players brings popular military drama to the stage

ON STAGE: John Rado as Colonel Nathan Jessep and Dylan Wheeler as Lt Daniel Kaffee in the Ballina Players production of A Few Good Men.

Tickets are on sale for their new production of A Few Good Men

Triumph of dreams ... it all started with one bike

A CLASSIC: Meerschaum Vale's Col McAndrew with his Triumph 1956 Speed Twin which he will show at the Northern Rivers Classic Motorcycle Club's Show and Shine at Alstonville Plaza on March 18.

Col has six classic bikes; 100 expected at show

Local Partners