RBA likely to hold rates until February, says expert

Friday 29 October 2010

Article by Mozo

The next official interest rate rise is likely to come in February next year, an expert has said.

While there has been growing speculation of an impending Reserve Bank (RBA) move on rates, lower-than-expected inflation data released this week has served to cast doubt on when that move will come.

Westpac economist Anthony Thompson argued that the likelihood of a rate hike when the RBA meets next week (November 2nd) has decreased after the country's headline consumer price index rose 0.7 per cent in the September quarter for an annual rate of 2.8 per cent.

Speaking to Smart Company, he said: "The need to be pre-emptive will still figure in Board discussions but the reasonable strategy now, with inflation still slowing, should be to at least wait for some more information about the need to be pre-emptive which will be amply available before the December meeting."

He predicted that the next rate rise will come early next year, most likely in February.

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