8 Jun 2010

Reserve Bank expected to start raising rates

2:14 pm on 8 June 2010

After a year of leaving interest rates at record lows, the Reserve Bank is expected to begin the gradual process of raising rates later this week.

The central bank releases its Monetary Policy Statement on Thursday, and most economists are picking interest rates to rise by 0.25% to 2.75%.

But returning rates to a more normal level is expected to be a slow and steady process, especially as nervousness about Europe's sovereign debt problems lingers.

Commonwealth Bank of Australia economist Chris Tennant-Brown says recently released domestic data paints a picture of a self-sustaining recovery.