Rate rise on the cards for August
13 APR 2011
3 min read
Finance
While there has been talk of the Reserve Bank leaving the cash rate on hold for the remainder of the year, NAB is forecasting a tightening of monetary policy come August and a second rise before Christmas.
In the latest NAB Business Survey NAB chief economist Alan Oster said the Australian household and labour market will be significantly stronger by August, justifying a 0.25 per cent rate hike by the RBA.
“We have maintained our end point target cash rate at 5.25 per cent, to be reached in November 2011,” Mr Oster said.
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“Any tendency for wage pressures to increase and become embedded in inflation expectations would see the RBA adopting a more aggressive monetary policy stance than we have assumed.”
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