Lets hope this is factored in the market. Would think so as...

Lets hope this is factored in the market. Would think so as pundits have indicated a rise would occur.

February 04, 2008
INTEREST rates are almost certainly on the way up tomorrow after new figures showed price pressures remain rampant in many parts of the Australian economy.

The central bank board meets tomorrow and is expected to sanction a 25-basis points rise in official rates to 7 per cent.

Under new arrangements, the Reserve Bank of Australia (RBA) will for the first time announce the decision on the same day with a statement to financial markets at 2.30pm (AEDT).

Some 17 out of 19 economists surveyed last week by AAP believe a rate hike is imminent.

Economic data published today supported the majority view, with a private sector survey showing inflationary pressures continued to rise in January.

The TD/Melbourne Institute inflation gauge gained 0.3 per cent in the month and rose 3.9 per cent over the year, to its highest rate since May 2006.

"On any measure, inflation remains uncomfortably high," TD senior strategist Joshua Williamson said.

Contributing most to the overall increase in inflation were price rises for utilities, financial services, automotive fuel and education.

"The RBA board meeting tomorrow will view the recent inflation trends with trepidation," Mr Williamson said.

But while the economic omens are dire, non-bank lender Aussie Homes today called on the central bank to stay its hand.

Chairman and chief executive John Symond said there was no reason for rates to go up given the volatility in global equity markets and recent rate rises by the major commercial banks.

"The major Australian lenders have done the Reserve Bank's work by lifting their own interest rates over the last few weeks and the effects of these moves are also yet to be felt," Mr Symond said.

"With so much volatility occurring across the world, I would suggest it would be wise to wait and see what shakes out from the current market turmoil we are experiencing."

Economists warn that even if the RBA hikes tomorrow, it might not be enough.

Some are forecasting a further move later in the year