Australia keeps rates at 4.5%

by Richard Kilner

Story link: Australia keeps rates at 4.5%

The Reserve Bank of Australia has announced that it is keeping the interest rate unchanged at 4.5%.

Since September last year the nation’s interest rate has been on a swift upward trajectory, increasing by 150 basis points over that time.

Despite ongoing turmoil in parts of the world, particularly the eurozone, the Reserve Bank has retained its forecast of approximately trend growth globally in 2010, as growth remains strong in North America and Asia.

Presently, the British interest rate is at the historic low of 0.5%, and has been for over a year.

However, the OECD, an influential thinktank, has called for the Bank of England to raise rates in a bid to fight rising inflation.

Despite the record low interest rate CPI is far above the target rate of 2%, and last month the 3.7% CPI prompted Governor Mervyn King to write to the Chancellor.