Peak retail industry body the Australian Retailers Association (ARA) said it was calling for an interest rate cut in November to give retailers some reassurance after various forecasts showed conflicting messages about consumer spend this Christmas.

ARA Executive Director Russell Zimmerman said despite conflicting reports about whether consumers will spend or save this Christmas, retailers aren't convinced Santa will be coming to town this year and they are desperate for an interest rate cut on Cup day to put more cash in people's pockets.

"As Christmas creeps closer forecasts and reports about consumer sentiment are filtering through. Two recently released reports that come to mind are the Dun & Bradstreet survey of Consumer Credit Expectations showing consumers are reluctant to spend, and the ING Direct Financial Wellbeing Index reporting consumers are confident in the lead up to Christmas.

"Official ARA Christmas forecasts are yet to be released, but anecdotal reports from ARA members indicate retailers are expecting a slow holiday trading season much like last year. An interest rate cut in November may just save the industry from history repeating itself.

"Over the past 18 months retailers have been the recipients of ongoing strain on consumers' budgets due to the soaring cost of living, and this is not viable if the industry is to be sustainable and see some decent festive season returns.

"Smaller retailers especially can no longer bear the burden of consumer uncertainty. Given small business is the engine room of Australia's economy and the retail sector employs 1.2 million people, there is too much risk in leaving interest rates at unmanageable levels.

"Of course, the RBA has to form a delicate balance between sectors posting different levels of growth as well as manage inflation levels, but retail is a vital sector in that mix, under serious strain and unable to maintain growth and viability with interest rates at their current level," Zimmerman said.

For over 100 years, the Australian Retailers Association (ARA) has been the peak industry body in Australia's $240 billion retail sector which employs over 1.2 million people. As an incorporated employer body under the Fair Work (Registered Organisations) Act 2009 and with a range of member services including business consulting, policy development, advocacy and education, the ARA promotes and protects over 5000 independent and national retailers throughout Australia. Visit www.retail.org.au or call 1300 368 041.