Interest rate rises impact consumer spending habits

Mike Smith is one of the managers of The Butcher Shoppe in Brisbane, which specialises in high-end meats and he said he has noticed a change in consumer spending habits.

He said customers were still flowing into the store in the same numbers but their spending habits had changed.

"There has been a couple of weeks of a little bit of a downturn with life itself, the change of government, just the cost of living, petrol prices, everything like that," he said.

"We have found that rather than buy a rib fillet, [customers] have come back to a sirloin or a rump.

"We're still turning over probably the same amount, we're still serving the same amount of customers but they've just tamed it down a little bit."

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The interest rate is currently at 5.1 per cent and this week RBA Governor Philip Lowe said he expected inflation to hit 7 per cent.

Capricornia Chamber of Commerce president Phil Henry said industries like retail and hospitality in the central Queensland region had already been heavily impacted by the COVID-19 pandemic, and said interest rate rises could impact them further but it was "too soon to say".

"It has only been a week since that [interest rate decision] and people need to probably take stock of where their spending is going," he said.

"This area, this region, it includes all of the money that comes through from agriculture which has been doing pretty well, and mining which has been doing exceptionally well.

"That's sort of the bedrock on which the local economy rests."

Mr Henry said looking to the future, he wanted to see more permanent job creation to future-proof the region.

"They need to be projects that create long-term sustainable jobs, not just building stuff for the sake of it," he said.

"There is a fair bit of discussions around town in industry groups about what they should be and that we do need to plan for a different economy."

Member for Gregory Lachlan Millar said interest rates have a "huge" impact on the regions.

"A lot of families who come out to regional Queensland buy a house and while the houses may be a little bit cheaper than they are in Brisbane, the interest rates will still have an impact on people with inflation and of course the increase in fuel cost," he said.

Mr Millar said he had not heard reports of small businesses in his region noticing a change in consumer spending yet.

"I think people are just getting ready, the RBA have signaled that there will be further increases to interest rates," he said.

"The good thing at the moment is the interest rates are still relatively low but we're not sure where we're going to be in 12 months time."