Not quite yet

The day of increased interest rates must have moved considerably closer this morning when the economic pundits were again surprised by the strength of the Australian economy. The Australian Bureau of Statistics reported that retail sales in August, seasonally adjusted, grew by 0.9% following declines of 0.9% in July and 0.8% in June 2009. The median of the economists surveyed by Bloomberg had predicted a much smaller sales increase of 0.5% 

The Reserve Bank has recently given the very broadest of hints that increasing official interest rates is on its agenda but those that bet on such things do not yet think it will be done at the Board's October meeting where the Crikey Interest Rate Indicator still has no change as the most likely outcome.