NEWS
Australia today became the first member of the G20 to raise interest rates since the financial crisis began.
In a sign that the country has weathered the economic storm better than many other nations, Australia's central bank decided to raise its benchmark interest rate by a quarter-point, to 3.25%.
It said economic conditions within Australia were stronger than expected, partly thanks to strong growth from China, a key trading partner. Unemployment is lower than feared, and house prices have risen steadily in recent months.
Data released last month showed that Australia's GDP rose by 0.6% in the second quarter of the year. The country's interest rates had been at a 49-year low of 3% since April.
The Reserve Bank of Australia also warned further rate rises are likely in the coming months to prevent the country's economy expanding too quickly.
Australia was the only advanced country to avoid falling into recession in the past year. Analysts said this is due to the success of official stimulus packages, including increased spending on infrastructure projects and cash handouts to encourage consumers to keep spending.
Tomorrow, Britain's central bank will begin its two-day meeting to set monetary policy, but economists are united in predicting that rates will be left unchanged at 0.5%
Source: guardian.co.uk
Published: 06 October 2009
