Interest rates to rise next week

The Reserve Bank is expected to raise interest rates next week by at least 0.25 per cent after June quarter CPI figures released yesterday showed inflation running at 3.2 per cent, up from 2.5 per cent in recent years and above the Reserve's target range to 2 – 3 per cent. Recent big rises in banana and petrol prices did not affect the CPI figures because it is a trimmed mean measure, cutting out extreme price movements at either end.