Economists expect a rate rise pause

Economists predict the next rate rise will occur in May at the earliest. The RBA left the official cash rate unchanged when it met for the first time this year on Tuesday. NAB chief economist Alan Oster said he expects the cash rate to peak at 5.25 per cent by August 2011.

“The RBA will be watching cost pressures during the reconstruction phase following the floods,” he said. The RBA would be forced to keep rates on hold for the foreseeable future, or at least until business confidence improves in the flood affected regions said Oster.

Source: The Advisor