0.25 per cent rate rise coming next week

The Reserve bank of Austalia will raise the official cash rate by half of one per cent before christmas say many economists. Most economists are now predicting that the central bank will move rates up by 0.25 per cent next Tuesday, Melbourne Cup Day.

The release yesterday of inflation numbers suggesting the Australian consumer price index rose by one per cent in the September quarter is expected to embolden the RBA to move interest rates up.

Macquarie interest rate strategist Rory Robertson said he expected three rate rises of 0.25 per cent each by February 2010 to take the official cash rate to 4.0 per cent. Property price inflation is thought to be of particular concern to the RBA.

Source: Herald Sun