Australia leaves interest rates unchanged

The Reserve Bank of Australia (RBA) has decided to leave official interest rates at 6.25 per cent, as widely expected by economists across the Tasman.

The central bank has lifted the cash rate three times this year - the latest in November - citing an inflation rate of about 4 per cent as a key reason.

Today's rate announcement is the last one until February next year.

Official figures for October showed a strong month for food retailers, department stores and sellers of recreational goods.

Economists say lower petrol prices fuelled the consumer spending.

The Australian Reserve Bank is forecasting that headline inflation could soon drop to the 2 per cent range.

However just last week a top Reserve Bank official said the bank was unlikely to cut interest rates, despite the predicted drop.

Financial markets see a slightly increased chance of another rate rise early next year.

- RADIO AUSTRALIA