Inflation must fall or rates will rise

The International Monetary Fund (IMF) has warned that interest rates will rise again if the dip in inflation late last year is not sustained. IMF expects that inflation in Australia will remain very close to the Reserve Bank of Australia's target 2-3 per cent band over the next year. Inflation should drop from 3.5 per cent last year to 2.8 per cent this year but increase to 2.9 per cent next year.

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