Sydney - A slowdown in consumer spending and economic growth will keep Australian interest rates on hold until at least the second half of 2008, economists say.
The Reserve Bank of Australia (RBA) left interest rates unchanged at 6.5 per cent after Tuesday's monthly board meeting, as widelytipped.
But some economists expect another rate increase in coming months, possibly as early as November, if next month's key inflation data shows building price pressures.
Grange Securities chief economist Stephen Roberts said last month's interest rate rise, to 6.5 per cent from 6.25 per cent, would hinder growth in the building sector.
Roberts said that with slower economic growth to the end of 2007, the RBA would be unlikely to raise interest rates again until at least the end of 2008. "We're at the top of the rate cycle," he said.
"There was no chance of them [the RBA] putting rates up today."
Tuesday's unexpectedly strong June quarter National Accounts, which showed annual gross domestic product at a three-year high of 4.3 per cent, added to the case for another move.
CommSec economist Martin Arnold said the RBA would be likely to leave interest rates on hold until at least the first quarter of 2008, as financial market volatility continues.
"With the turbulence that's going on, the RBA would want to have a clear picture of where financial markets are," he said.
"They want to see stability.
"They're unlikely to make too many big moves while there's volatility going on."
Arnold said inflation was likely to stay within the central bank's 2-3 per cent target range for the rest of 2007, because of last month's interest rate rise.
