RBA 'to follow more aggressive rates strategy in 2013'

The Reserve Bank of Australia (RBA) is likely to pursue a more aggressive rates strategy in 2013 than in 2012, according to one expert.

Robert Mellor, managing director of business research firm BIS Shrapnel, said he expects the cost of homes to rise by between two and four per cent in 2011, reports the Australian.

Speaking at the Business Forecasting Conference in Sydney, he added that two interest rate increases are likely next year.

However, Mr Mellor suggested that skills shortages and inflationary pressures could prompt the RBA to engage in a more aggressive rates strategy the year after.

Indeed, he claimed that in the second half of 2013 variable rates might peak at 9.5 per cent.

The expert asserted that this could impact on affordability and slow demand.

This comes after the chief economist for HSBC Paul Bloxham forecast that the RBA will increase rates in July or August this year, reported the Herald Sun.

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