Westpac predicts rate rise next week

Westpac's chief economist said financial markets are currently underpricing the risk that interest rates will need to be raised at the Reserve Bank of Australia's next policy meeting in early June.

"The markets seem to believe that case will not be fully made for more than a year. We have more confidence in the clarity of the bank's current message," Mr Evans said.

"We continue to expect a rate move in the very near-term," he said.

Westpac is forecasting that the Australian economy will grow at an annualised 4.5 per cent in the second half of 2011, Mr Evans added.

Source: The Australian