As we saw from this month, it just goes to show that no-one other than the Reserve Bank really know what is going on with rates. Almost every forecaster, finance commentator and anyone with an interest was predicting rates would go up this month.

However, it seems the RBA has used common sense and has decided to leave rates on hold. Maybe the turmoil on the international and local stock markets over the past couple of weeks helped with their decision to ‘wait and see’.

Good news for now, but expect further rises throughout the year and  prepare to build up your savings in your offset accounts. Most economists seem to think that over 2010 rates will rise in the vicinity of 1% but that remains to be seen. How and when the rises come will be for the RBA’s discretion. The faster the economy grows the faster the rises will come. Given that we still have relatively low rates it is not realistic to expect they will stay there. Another indicator is that fixed rates are already WELL above variable rates and the property market continues to power ahead.

Anyhow, good news for now so we should enjoy it while we can and I think the future is very exciting for Australia.