Interest rates set to rise as inflation continues to soar

Leading Australian Economists are predicting further interest rate hikes as a result of Australia’s strengthening economy and rising inflation rate.

Given Australia’s steady economic recovery, the Reserve Bank of Australia no longer requires interest rates to be kept artificially low. As such, home owners should expect a further rise of 0.25% on Tuesday, February 2nd.

On a more positive note, competition to acquire new clients means major mortgage lenders are likely to absorb about 30 basis points of the Reserve Bank increases during the second half of 2010.

Happy savings!

David Kaplan.