Well, we were all wrong; the Reserve Bank left rates unchanged at 3.75% at yesterday’s board meeting, preferring instead to sit and assess how the three previous rate increases work their way through the economy.
In fact all 20 economists surveyed by Bloomberg tipped a rate rise yesterday.
"Since information about the early impact of those changes is still limited, the Board judged it appropriate to hold a steady setting of monetary policy for the time being," Bank Governor, Glenn Stevens said in his post meeting statement.
The RBA’s decision left the banks sitting on their rate rise announcements.
But it knocked the Aussie dollar down a cent to around 88.10 US cents, a six week low.
There was, however, a warning from the RBA Governor that if the economy continues to grow, as expected, then rates will go up again.
"If economic conditions evolve broadly as expected, the Board considers it likely that monetary policy will, over time, need to be adjusted further in order to ensure that inflation remains consistent with the target over the medium term," Governor Stevens concluded in his statement.
Yesterday’s National Australia Bank survey for December suggested (as did Monday’s ANZ job ads figures) that the three rate rises might have had an impact, with business confidence and advertising for new staff down in both surveys.
Offsetting that was the strong 13.6% rise in house prices in 2009, according to the ABS home price index for the December quarter and the year
Also, solid retail sales in November and the surprisingly strong jobs figures for December. Retail sales, building and trade for December are all updated on Thursday by the ABS.
"With the risk of serious economic contraction in Australia having passed, the Board had moved at recent meetings to lessen the degree of monetary stimulus that was put in place when the outlook appeared to be much weaker.
"Lenders have generally raised rates a little more than the cash rate over recent months and most loan rates have risen by close to a percentage point.
"Interest rates to most borrowers nonetheless remain lower than average."
Friday sees the RBA reveal its new forecasts in its first Statement on Monetary Policy for 2010.
