The call by retailers to lower the cash rate for December has been heard.

The Reserve Bank of Australia (RBA) has decided to lower the cash rate by another 0.25 per cent down to 4.25 per cent.

RBA governor Glenn Stevens said given the debt-crisis over in Europe, as well as precautionary behaviour by firms and households it will mean that there will be a “likelihood of a further material slowing in global growth has increased”.

According to Margy Osmond, the Australian National Retailers Association (ANRA) CEO, this decision will help boost Christmas retailing.

“The Reserve Bank’s decision has the potential to lower the stress for families as utility costs continue to climb, but it’s now up to the banks to deliver and pass on the whole of the cash rate cut to customers,” she said.

“Christmas retailing is immediately impacted by changes in the cash rate, people feel more confident to spend and more comfortable with managing their mortgage repayments. So maybe they will put a bit away for a rainy day, but they also feel more confident that getting a few extra gifts this year won’t break the bank.”

There are expectations that Australians will spend up to $25 billion in the weeks lead up to Christmas.

“Retail has already seen a boost with the November cash rate cut and the RBA has now delivered a second lift to the sector which we hope will see retail sales figures almost double in 2011 from last year – though it is unlikely they will reach the long-term average of 6 per cent growth,” Osmond said.