Stable inflation may abate rate rise

27 October 2010 | 18:10 - By Ricardo Goncalves

The odds on a Melbourne Cup Day interest rate rise have dramatically reduced on the back of the latest official inflation figures.

The odds on a Melbourne Cup Day interest rate rise have dramatically reduced on the back of the latest official inflation figures.

Both the headline and underlying rates have remained well in between the Reserve Bank's comfort range of two to three per cent.

In this quarter, rising utility prices have been offset by a fall in food and fuel costs.

But while traders have now only priced in a 17 per cent chance of rate rise, down from 50 per cent before the CPI numbers were released, not everyone is convinced the Reserve will sit on its hands next Tuesday.

Helen Kevans, an economist at JP Morgan, says capacity constraints will lead to inflation down the track, and that in turn will lead to higher interest rates.

 

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Comments (1)

03 Nov 2010 14:12 AEST

DSFE

From: SDAGFEA

AGAEA

as will a lame-duck burberry belt

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About this Blog

SBS Presenter Ricardo Goncalves with the latest in finance.

Ricardo Goncalves Ricardo Goncalves is a Presenter / Reporter for SBS World News Australia

 
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