January retail sales edge 0.1pc higher, below expectations
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grew0.4 per cent in the last quarter, with the annual rate the slowest since 2013.

What is driving the slowdown

KordaMentha is well placed to comment on the slowdown in consumption, as he is currently administering business closures like retailer Roger David,Crabtree & Evelynand .

He warns that it is not the wealth effect – where falling house prices tighten habits – that slows consumption but employment and income. And one of the big hits to creating more employment and income growth has been tighter lending conditions stemming from the .

“The small- and medium-size business space is such an important part of the backbone of the economy. It employs so many people and that’s where wages grow,” Mr Langdon said, “But the royal commission has placed a lot of restrictions on people borrowing money to set up businesses.”

“People aren’t even bothering to get a loan now because they think it’s too hard,” said Mr Langdon.

In his address to Business Summit on Wednesday, said the more important influence on consumption than house prices was household income.

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“Growth in household income has been quite weak for a while,”Dr Lowe said.

“It is plausible that, for a time, this didn’t affect people’s expectations of their future income growth … So they didn’t change their spending plans much…

“However, as the period of weak income growth has persisted, it has become harder to ignore it. Expectations of future income growth have been revised down and it is likely that this is affecting spending.”

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