CBA warns of impending rise
(24 September 2010 – Australia) The Commonwealth Bank of Australia has followed in NAB’s footsteps, warning households and businesses that rates could rise as early as October.
The Reserve Bank has put a heavy emphasis over the last fortnight on the rapid growth of the economy and how much it is expected to grow over the next year, warning that inflation could rise if measures aren’t taken to keep growth in check.
The Commonwealth Bank has said it believes the RBA will increase the official cash rate by 25 basis points to 4.75 percent on October 5.
Michael Blythe chief economist CBA, said that the likely move in October would be the first of a number of interest rate rises in the next few months.
The retail bank has forecast rates will increase to 6 percent by the end of next year.
CBA’s rate forecast came only days after National Australia Bank announced its position on the impending rate change.
Mr Blythe added that there is a lot of momentum building up in the economy at the moment, which suggests that rates will have to be raised.
Especially given that the bullish commentary and overtones from the RBA, it sounds like they are priming the market that they are going to take the step and move rates, Mr Blythe added.
The bank’s chief economist highlighted that an October move would not be the last for the year.
The big issues really for the RBA are the inflation risk and having an economy that is running close to full capacity, Mr Blythe added.
The Commonwealth Bank has said it believes the RBA will increase the official cash rate by 25 basis points to 4.75 percent on October 5.
Michael Blythe chief economist CBA, said that the likely move in October would be the first of a number of interest rate rises in the next few months.
The retail bank has forecast rates will increase to 6 percent by the end of next year.
CBA’s rate forecast came only days after National Australia Bank announced its position on the impending rate change.
Mr Blythe added that there is a lot of momentum building up in the economy at the moment, which suggests that rates will have to be raised.
Especially given that the bullish commentary and overtones from the RBA, it sounds like they are priming the market that they are going to take the step and move rates, Mr Blythe added.
The bank’s chief economist highlighted that an October move would not be the last for the year.
The big issues really for the RBA are the inflation risk and having an economy that is running close to full capacity, Mr Blythe added.
Subscribe