Inflation figures the rate rise decider

Economic analysts in Australia believe that inflation figures, due for release next week, will determine whether the Reserve Bank of Australia will raise interest rates for the fourth time in 12 months when it meets at the beginning of February. Three of the nation's big banks consider the likelihood of a rate rise an even bet, while one thinks an increase is certain. Analysts believe that the inflation trigger point for an interest rate increase of 0.25 per cent will be 0.7 per cent. A Melbourne Institute survey following the August 2006 rate rise found that 18.3 per cent of people found interest rate increases “somewhat stressful” while 10.7 per cent see them as a “huge concern”.

Advertisement