The Reserve Bank of Australia has left the official interest rate steady at 4.75% for this month.
However, in a change of tone compared to previous media releases, the Reserve Bank believed that inflation has troughed and it was prepared to increase interest rates without necessarily waiting for the next quarterly inflation figure.
Whilst the stronger Australian dollar was helping to keep prices in check, last week’s higher than anticipated inflation figure together with the boost in demand from the rebuilding efforts and the coming investment project boom estimated by the Deloitte Access survey to be approximately $767.5 billion will all add to inflationary pressures which the Reserve Bank is keen to control.
The question on everybody’s lips is when, not if, interest rates will rise in the near future.
In the meantime, the Reserve Bank will monitor employment, wage and consumer confidence and spending figures in determining if inflation was moving and to act early if they do.
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