Little chance of rate rise

Australian official interest rates set by the Reserve Bank (RBA) seem assured of holding at current levels as a worst case scenario following decisions by US and German authorities not to move rates upwards.

This maintains the outlook which was provided by the RBA's latest quarterly report which indicated that the Australian economy has the potential to grow considerably faster without endangering inflation.

The reality is that all risks to interest rates are on the downside, with the possibility of a further rate cut this side of Christmas if employment and activity fail to respond to the RBA's cuts of 2.5% over the past year.

Reading between the lines in the RBA report, action to slow the economy is unlikely for at least twelve months.