WEEKEND ECONOMIST: First time for everything

Since the RBA started announcing rate moves back in 1990, we have never seen three consecutive months when rates have been raised. But recent strong data means history will be made next week with another 25 basis-point move.

Our core view throughout this tightening process has been that the RBA assesses that growth will be restored to trend in 2010. Policy needs to be forward looking and 'emergency' rate settings are not appropriate if growth is returning to trend. The 'emergency' settings occurred earlier this year in February (100 basis-point cut) and April (25 basis-point cut). Only 50 basis points of the target 125 have been undone. With the Board not meeting in January, a December move appears timely.

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