RBA 'will raise rate in July or August'

The Reserve Bank of Australia (RBA) will raise its official rate in July or August, according to an expert.

Paul Bloxham, chief economist for HSBC, said the "recent weakness" in the employment market could delay the RBA, reports the Herald Sun.

Despite forecasting that the rate rise would be later than May – which was his previous prediction – Mr Bloxham said he expects there to be two increases this year.

"The case for a May or June move has been weakened by recent labour market data showing that employment has levelled out over the past few months," the expert added.

He asserted that employment growth is expected in the coming months and that the outlook for the economy is still "very strong".

At the start of February, the RBA announced that it would leave the cash rate at 4.75 per cent – the level it was set at in November last year.

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