Strong spending figures will be behind any decision by the RBA to raise rates on Tuesday.
Home buyers and businesses should brace for the Reserve Bank to lift interest rates for the first time in five months on Tuesday, and prepare for rates to remain high for a year as the central bank fights persistently high inflation.
Inflation has fallen from its December peak to 5.4 per cent in the year to September. Reserve Bank forecasts show inflation falling to the top of the bank’s 2-3 per cent range by the end of 2025. Rynne said the RBA wants to ensure that people believe inflation will return to a normal level within the bank’s timeframe, and they could use another rate rise to do so.ANZ senior economist Adelaide Timbrell said while the September inflation data had been driven largely by higher fuel prices, the RBA remains responsible for all inflation - whether it can directly influence it or not.
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