Spending spree may have hidden cost

Strong retail spending figures in November have increased the likelihood of the Reserve Bank lifting interest rates when it meets again in the first week of February. Sales grew by 0.8 per cent in the month compared with expectations of 0.5 per cent growth according to figures released by the Australian Bureau of Statistics yesterday. The spending spree continued with a total of $36.5 billion going through the registers in the six weeks to Christmas Eve, up 7 per cent on the same period last year said the Australian Retailers Association. Analysts have warned that if consumers don't show any evidence of tightening their belts the RBA will have no choice but to raise rates further, regardless of any additional increases imposed by lenders to cover their funding costs.