Private rate rises

Eight of 21 Australian economists surveyed are tipping a rate rise by the end of the year. Two even tip a hike by the Reserve Bank next week. But there is no need to hold our breaths.

Major banks, the Commonwealth, National, Westpac and St George have all introduced higher card rates that are not directly linked to RBA (central bank) interest rate rises.

The Reserve Bank has now regulated interchange and cut back the merchant service fees. As a result, card issuers have shifted more of the cost on to consumers through higher annual fees, penalty charges and interest rates.

Banks used to adjust their credit card interest rates in line with official cash rates but not any more.

Obviously the concern over an official rate rise in Australia is academic when banks are boosting their rates independently. So obviously official economic figures are no longer to be relied on when it comes to the big picture.