RBA to tighten, NAB says
(23 September 2010 – Australia) National Australia Bank’s chief economist Alan Oster has said that the Reserve Bank of Australia could hike interest rates as early as next month.
According to the bank’s top economist the combination of the stronger-than-expected June Quarter National Accounts, a continued improvement in the Australian labour market and some calming in international financial markets would induce the Reserve Bank to prepare for policy tightening.
Until recently, Reserve Bank officials seemed to be signalling that interest rates were around average and growth was close to trend. There are now enough straws in the wind for us to believe that the tightening phase may well begin sooner rather than later and probably before the release of the next CPI reading in late October, Mr Oster said.
National Australia Bank has left its medium term interest rates forecast unchanged, expecting the cash rate to reach 5.5 per cent by the end of 2011, the bank has brought forward the timing of the next 25 basis point rate rise from early 2011 to next month.
Until recently, Reserve Bank officials seemed to be signalling that interest rates were around average and growth was close to trend. There are now enough straws in the wind for us to believe that the tightening phase may well begin sooner rather than later and probably before the release of the next CPI reading in late October, Mr Oster said.
National Australia Bank has left its medium term interest rates forecast unchanged, expecting the cash rate to reach 5.5 per cent by the end of 2011, the bank has brought forward the timing of the next 25 basis point rate rise from early 2011 to next month.
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