Embattled small businesses will be granted some respite today after the Reserve Bank’s decision to halt its rapid run of interest rate increases.
“Small business owners today will be breathing a sigh of relief after reprieve from another interest rate hike,” ACCI chief of policy and advocacy David Alexander said.
Following its March rates decision, the Australian Chamber of Commerce and Industry urged the central bank to pause any increase to the cash rate at its April meeting.
“The 10 consecutive rate increases since May have been difficult for households and small businesses alike. The Reserve Bank has made the right choice to pause and take stock of the tightening that’s already in the system,” Mr Alexander added.
“A pause will help small businesses take a breath as they adjust to the challenging economic environment of high energy costs and high inflation.
“CPI data released last week has reinforced expectations that Australia has begun to turn the corner on inflation, but it still remains high, and the RBA concedes further rate hikes may be needed.
“Coupled with the global banking ructions in the United States and Europe, and the stresses across residential and commercial construction, it is clear businesses face a turbulent outlook in the months ahead.
“While today’s decision is encouraging, the challenge for policymakers lies in navigating the narrow path towards a soft economic landing and addressing the inflation challenge.
“With small businesses confronting an increasingly uncertain global economic outlook, this reinforces the need for a sustainable wage increase for the 2.66 million award employees under the Fair Work Commission’s annual wage review.