Case builds for rate rise next week
Rising oil prices are adding to pressure on the Reserve Bank to increase the official cash rate when it meets next week. With tensions between the US and Iran escalating and concerns that the conflict between Turkey and Kurds in the north of Iraq could worsen. The price of a barrel of crude oil hit a new record of $US92.97. If this level holds Australian motorists could be hit by a 10 cent per litre fuel price increase within two weeks. Figures on retail turnover are due out this week with economists forecasting a 1.6 per cent increase in sales for the September quarter. Futures markets currently have the probability of a rate rise at the RBA's next meeting at 85 per cent and have factored in another rise before May 2008.