'Hike may come sooner than expected'
Reserve Bank governor Graeme Wheeler today left the official cash rate at 2.5% but indicated that the next move would definitely be up.
His accompanying speech indicated that the pressure to lift the rate was building. There were signs that inflation was rising and could reach the higher end of the 1% to 3% target band over the coming year.
He said construction activity was growing, which would have flow-on effects into the wider economy.
How soon the Bank would raise interest rates would depend on how the housing market behaved. “The extent of the monetary policy response will depend largely on the degree to which the growing momentum in the housing market and construction sector spills over into inflation pressures.”
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