Rate rise the appropriate setting - ANU Shadow RBA

 Australia's official interest rates should increase in October, with confidence in a future rate rise also increasing, The Australian National University (ANU) RBA Shadow Board has found. The board of the Reserve Bank of Australia (RBA) will meet on Tuesday 2 October to review official interest rates, which have been at a record low of 1.5 per cent since August 2016. Chair of the RBA Shadow Board Dr Timo Henckel said the Australian economy grew 0.9 per cent in the June quarter, above the forecast 0.7 per cent. "Growth was supported by strong domestic as well as overseas demand; fixed investment, however, remained flat," Dr Henckel said. "The RBA Shadow Board rules out any likelihood that a reduction in interest rates could be called for. Instead it attaches a 45 per cent probability that holding interest rates steady at 1.5 per cent is the appropriate setting, while the confidence in a required rate hike equals 55 per cent." CPI inflation remains at 2.1 per cent, and the unemployment rate at 5.3 per cent. The Shadow RBA expects there'll be plenty of interest in the November announcement around wage growth, which could indicate whether the relatively low unemployment rate is generating any inflationary pressure.