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Inflation pushing interest rates up 28 January 2010
Inflation data released yesterday by the Australian Bureau of Statistics supports a rise in interest rates next week. Underlying inflation was 0.6 per cent in the December quarter and between 3.2 and 3.6 per cent over the year to December.
ANZ Bank economist Alex Joiner said underlying inflation was uncomfortably high while the economy was rapidly returning to stronger growth. BT Financial Group chief economist Chris Caton said the Reserve would lift rates on Tuesday. ''Monetary policy has switched focus quickly from limiting the damage to managing the recovery, and the Australian economy simply no longer needs artificially low interest rates,'' he said.