Retail spending is down for the first time since the COVID-19 delta strain-induced lockdown in 2021. 

In the last three months of 2022, retail spending fell by around 0.2 per cent.

Department stores felt the biggest drop in sales, while fashion and household goods retailers also felt the pinch.

“It’s interesting to see that it’s not just retail spending we’re cutting back on, it’s things like reducing the number of coffees and lunches we eat out,” Today reporter Mia Glover told Laurel & Mark.

“And also, reducing the number of car trips you take just to save petrol, cutting back on entertainment.”

Press PLAY below to hear how interest rates have changed Aussie spending habits 

While it’s the outcome the RBA has been hoping for as it aims to bring inflation down, it isn’t good news for small businesses.

But the drop isn’t enough to avoid another interest rate hike today, with economists tipping a ninth consecutive rise.

While most are predicting an 0.25 per cent increase this afternoon, some believe it could rise by as much as 0.5 per cent, which would bring the cash rate to 3.6 per cent.

A 0.25 per cent hike today would see households with a $750,000 mortgage forking out an extra $1400 every year.

Image: Getty