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National Australia Bank (NAB) says it expects the Reserve Bank of Australia (RBA) to increase official interest rates once or twice before the end of the year.

The RBA earlier this month decided to keep the benchmark cash rate at 3.0 per cent, a 49-year low reached after a cut in April.

At the time, RBA governor Glenn Stevens said the “accommodative setting” of monetary policy was appropriate for the time being.

However, better-than-expected economic growth figures released last week have economists tipping an interest rate rise before Christmas.

Real gross domestic product (GDP) rose by a better-than-expected seasonally adjusted 0.6 per cent in the June quarter, above a rise of 0.2 per cent expected by market forecasters.

NAB head of personal banking Lisa Gray on Sunday said the lender was expecting a rise in official rates by the end of 2009.

“Our chief economist recently came out and has brought forward some of his increases, so we’re certainly expecting one or two before Christmas. That’s our expectation in terms of our forecast,” Ms Gray told ABC TV.

The NAB will consider funding costs and its competitors’ movements before changing its interest rates, she said.

“We’ll look at what our funding costs are at that point in time, what our competitors are doing, but also we’re very focused on trying to ensure we can keep interest rates as low as possible for consumers,” Ms Gray said.