Interest Rates to hold

The RBA is not expected to lift the official cash rate again until May 2011, according to NAB.

The recent economic data showed that the economy was not bouncing back as quickly as first thought which would indicate the Board to hold fire on rates until mid-2011.

The  evidence of the income and investment effects of the mining boom and its inflationary potential are unlikely to be evident until mid 2011.

Inflation is expected to accelerate and most of the major banks  have a target cash rate at around 5.25 per cent. The way things are shaping up it is unlikely to be reached before August 2011.


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