Westpac chief claims interest rates will rise in September

Interest rates in Australia will go up 25 basis points in September, according to Westpac chief executive officer Gail Kelly.

At an Australia-Israel Chamber of Commerce lunch in Melbourne, she forecast that rates would be maintained at the current level for the near future.

Ms Kelly added that there is unlikely to be a return to the "double-digit days" of credit growth and that consumers and businesses remain relatively cautious, despite the "healthy overall economy".

"Possibly, September time, I would see the potential for another interest rate change and I think that would be 25 basis points up," she stated.

The last time the Reserve Bank of Australia increased the base rate was in November 2009, which was when it rose to its current level of 4.75 per cent.

Ms Kelly asserted that Westpac is constantly reviewing its position on interest rates, but added that the cost of funding means savers are likely to benefit, whereas borrowers may end up paying more.

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