Interest rates 'to remain unchanged for some time'

Wednesday 26 January 2011

Article by Mozo

The Reserve Bank (RBA) will likely keep interest rates on hold when its board meets next week, a leading economist has said.

Interest rates 'to remain unchanged for some time'

CommSec chief economist Craig James said it was encouraging for homeowners that interest rates looked set to remain unchanged "for some time" following the release of lower-than-expected inflation data.

Australian Bureau of Statistics figures showed that the consumer price index rose 0.4 per cent in the December quarter of 2010, thus falling below market expectations of a 0.8 per cent increase and remaining within the RBA's target band for inflation.

Speaking to the Herald Sun, Mr James said the low outcome was encouraging given that the country had seen some sharp rises in fruit and vegetable prices in the quarter.

"Provided consumers continue to shop around (and) put pressure on retailers to keep prices low then we're going to see inflation remaining low here in Australia even despite the one-off impact from the floods," he added.

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