SYDNEY, AAP – Shares have had their best week of the year on the ASX as investors settled with the prospect of higher rates in 2022.

The market was little changed for most of Friday until a late broad-based rally.

The Reserve Bank’s revised forecast of higher inflation did not worry investors, given the bank earlier this week ruled out imminent rate rises.

The benchmark S&P/ASX200 index closed up 42.1 points, or 0.59 per cent, to 7120.1 points.

The All Ordinaries index closed higher by 44.2 points, or 0.6 per cent, to 7418.8 points.

For the week, the market rose 1.89 per cent.

Investors will next week focus on earnings season. The Commonwealth Bank is among those reporting.

The Aussie dollar was buying 71.47 US cents at 1619 AEDT, higher from 71.37 US cents at Wednesday’s close.