Australia holds base rate

The Reserve Bank of Australia has held its equivalent of the Bank of England base rate at three per cent.

Governor of the bank Glenn Stevens said the "near term" prospect for inflation was for this to go on falling, justifying a decision not to alter the cash rate this month.

Such a situation could encourage those seeking to buy real estate in Australia, as it may suggest there is no likelihood of a rise in interest rates soon.

Mr Stevens also noted that a wide range of other indicators have been much more positive than had been predicted, with unemployment rising by less, retail sale figures remaining resilient and China - Australia's largest trading partner - seeing healthy economic growth.

Last month it was suggested that Australia's economic recovery will lead to a property boom.

Writing in the Australian newspaper, chief economist for BIS Shrapnel Frank Gelber said that from 2011 the recovery will shift from being slow and sluggish to strong and healthy.

Like this? Then share with your friends and colleagues!