Fed: Interest rate outcome known this morning

AAP General News (Australia)
08-02-2000
Fed: Interest rate outcome known this morning

Money markets and homeowners will be hanging on the outcome of a Reserve Bank meeting
to be announced this morning.

The Reserve Bank met yesterday with the issue of interest rates uppermost in the mind
of most members.

While most pundits don't expected the meeting to lead to an announcement, recent figures
on inflation and wage rises have forced a rethink.

Inflation has just hit a four year high of 3.2 per cent, the first time it climbed
through the bank's self-imposed upper limit of three per cent.

Wages have also been rising, hitting a four and a half year high of 4.5 per cent.

But this was all tipped on its head by figures yesterday showing the single biggest
drop in building approvals since figures were recorded.

In the wake of the GST, building approvals dropped almost 18 per cent through through
June, while they are done 24 per cent for the year.

If the Reserve Bank does decide to lift interest rates, its decision will be announced at 9.30am.

AAP RTV sw/wz/jx

KEYWORD: ECONOMY (CANBERRA)

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