THE GOLDILOCKS ECONOMY

LAST week was an encouraging week of data: solid economic growth figures and the Reserve Bank comfortable with interest rates and where we’re going.

Would you believe we’re continuing our world record as we’ve just started our 27th consecutive year of positive economic growth. The 0.8 per cent growth for the June quarter shows an acceleration from the 0.3 per cent in the March quarter.

At 1.8 per cent annual growth, the expansion rate is a little below the long term average but is showing early signs of continuing to accelerate for a while.

More importantly, was the RBA decision to keep official interest rates on hold for the 13th consecutive month.

The commentary was the most important element of the decision. Basically the RBA Board is comfortable with the current levels and can’t foresee changes in the future.

Some experts expect rates to stay at this level for up to a year longer.