Interest rate hike for October & November?

The Reserve Bank is clearly more convinced about the inflation risks and is prepared to act before some other issues, particularly associated with the attitudes of consumers are clear.

The warning that rate rises are on the way was explicit it was likely that higher interest rates would be required The RBA is clearly driven by its assessment of Asia rather than the need for a more vibrant G7.

As a mortgage broker my previous view was that a total increase of 75bps could be expected through 2011 beginning in February. It now seems likely that the RBA will choose to follow the October move with another one in November as long as there is no major downside surprise with the Q3 CPI or a substantial sentiment. Home loan interest rates will get hiked in October and a good chance of November as well.


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