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Rates to rise in Feb: AMP

11 January 2010 Reporter

Interest rates are likely to rise again when the Reserve Bank meets in February, according to leading economists.

AMP’s head of investment strategy and chief economist Shane Oliver said robust building approvals and house prices suggest more interest rate hikes are on the way.

“I was thinking the RBA would wait till March before moving again, but with the run of strong economic data lately a February move is looking increasingly likely,” Mr Oliver said.

“Key indicators to watch in deciding to whether the RBA will go again next month are the December employment report to be released in the week ahead and December quarter inflation figures due later this month.”

According to Mr Oliver, the Reserve Bank is likely to continue moving the cash rate up in 0.25 per cent increments.

“I think we will see the cash rate rising to 4.5 per cent by mid-year and 4.75 per cent by year end,” he said.

Rates to rise in Feb: AMP
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