The RBA will need to raise interest rates to curb growth and inflation the Organisation for Economic Cooperation and Development (OECD) said in its Economic Outlook released overnight.
The OECD expects headline inflation to average 3.2 per cent over 2008 and warned that interest rates will have to be tightened to bring the CPI in line with the RBA’s inflation target of two to three per cent.
The organisation also forecast that output growth could hit 4.25 per cent this year but that it should gradually slow over 2008-09.
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