Rate rise speculation increases

The latest economic data suggests that another interest rate rise is possible, and may be as soon as April. The wages data and national accounts figures for the December quarter and an increase in the value of housing finance approvals for January have raised speculation that the Reserve Bank of Australia (RBA) will lift interest rates this year. The RBA is most likely to try and avoid changes in the lead up to the federal election in order to keep monetary policy and politics separate, but may lift rates in April or May before the pre-election budget is announced.

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