Dual rates rise tipped

A MORE upbeat outlook for the Australian economy has prompted some economists to now tip two interest rates hikes next year.

Economists at ANZ are now expecting two rate rises in 2018, which would lift the cash rate to 2.0 per cent from its present record low of 1.5 per cent. In a report released yesterday, ANZ economists David Plank and Felicity Emmett say this view reflects the more positive economic outlook and easing downside risks.

“After these hikes we see the (RBA) sitting pat in 2019 as highly indebted households digest the impact of higher rates,” they said.

Among economists at the other big four banks, National Australia Bank is predicting a rate rise in August 2018, followed by further rises to 2.5 per cent by the end of 2019.