Nab: Interest Rate Rise Could Happen Pretty Soon

The interest rate may be about to increase again

, one organisation has said.

There could shortly be another rise in the interest rate, according to one organisation.

National Australia Bank (NAB) believe the Reserve Bank of Australia (RBA) could increase the official cash rate again "pretty soon", the Australia Associated Press reports.

Robert Brooker, head of Australian economics at the organisation which offers a range of NAB savings accounts - said: "People are right to be cautious because each meeting will be pretty sensitive to the data out there."

However, Nomura Australia economist Stephen Roberts does not believe it is that straightforward or predictable and admitted there was "almost nothing" in the last minutes released by the RBA to suggest what its next decision might be.

"When they (the RBA) make the next move, they will take lending interest rates not only to the target for the average for home loans, but a little bit above for business lending," he added.

Nevertheless, he predicted that the organisation may not increase the rate again until June or July, stating that the next choice it decides upon is a "tricky one".

The last cash rate rise by the RBA was made at the beginning of April when it raised the levels from four per cent to 4.25 per cent.

This filtered down to some banks, who hiked up their interest rates shortly after, such as ANZ which increased the rate on its credit cards by 0.25 per cent per annum.

Moreover, this had an effect on its business lending and a selection of deposit products, including the ANZ Online Saver and ANZ Progress Saver.

Craig James, an economist for CommSec, predicted there will be at least one more rise by the RBA which is getting much closer to where it wants to be - although he does not definitely think it will occur in May.

by: Sam Gooch

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