Too soon to call a rate rise

The RBA's decision not to raise rates was no surprise, but economists wedded to the idea of a rate rise next year may be in for a shock.

The cash rate remained at 2.5 per cent in October -- the fourteenth consecutive meeting without a rate move -- and the Reserve Bank of Australia (RBA) has yet again signalled a period of stability. But despite the almost universal agreement among banking economists that rates will rise next year don’t be fooled, the outlook remains as uncertain today as it was at the beginning of this year.

The Australian economy continues to face a number of headwinds -- which if anything have only exacerbated in the past few months -- and it remains unclear whether the non-mining sector is capable of rebounding sufficiently.

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