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Two additional rate rises to come: ANZ

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The Adviser

The official cash rate will reach 7.75 per cent by the end of the year, according to ANZ.

The bank’s Monetary Policy Update released yesterday said the RBA will increase the cash rate by 25 basis points in August in response to the second quarter CPI – which it anticipated will reveal higher than expected inflation.

The bank also predicted a 25 basis point hike around November. Higher than expected growth, rising inflation and accelerating wage outcomes were all viewed as possible grounds for the rise.

By factoring in a modest tightening of financial conditions ANZ predicted core inflation to return to the RBA's target band by the end of 2010.

Published: 28-05-08

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