Rates to rise later in 2011: economists

The Reserve Bank of Australia (RBA) surprised no one by leaving the cash rate unchanged but economists expect a rise in the next few months.
The central bank on Tuesday opted to leave the cash rate at 4.75 per cent, where it has been since November.
In a statement that accompanied the interest rate decision, RBA governor Glenn Stevens cited low inflation, a pick-up in private investment and ongoing consumer spending as reasons for holding off the rate rise button.

ICAP senior economist Adam Carr said the decision to leave rates on hold was unsurprising although economic conditions suggested the RBA should have raised rates.
"There is no credible counter to the idea that rates shouldn't be going higher today," Mr Carr said.
"This idea that consumers are being cautious is demonstrably false. There's no truth to it and no evidence for it.
"I think the sooner we let go of this flawed analysis, the sooner we can get on with the job of managing what is a very strong expansion."
He said the RBA's statement was slightly more hawkish than the language it had used recently.
"They tinkered with the description of monetary policy, highlighting that it's mildly restrictive - this is relatively new to their last statement," he said.
"The way the data flow is going, particularly the sharp pick-up in consumer spending, I don't think a rate hike should be too far off."
HSBC chief economist Paul Bloxham said the RBA statement offered no surprise.
"No one was expecting them to change rates," Mr Bloxham, a former RBA employee said.
"It repeats the story they have been telling us over the past couple of months."
Mr Bloxham said he did not expect the central bank to lift the cash rate until the second half of the year and that it would be 5.25 per cent by year's end.
AMP Capital Investors chief economist Shane Oliver said the RBA statement implied no great urgency to move.
"The general impression is that the Reserve Bank is still pretty happy with the way things are and that the outlook for inflation remains fairly benign over the year ahead," Dr Oliver said.
The RBA said in its statement that the adverse economic effect of the recent floods in Queensland and Victoria was temporary.
"Whatever the impact, the Reserve Bank has signalled it's prepared to look through the impact of the floods and focus on the medium-term outlook," Dr Oliver said.
"My take on it is the RBA maintains a weak tightening bias."
Dr Oliver said he expected the RBA to keep the cash rate on hold for the next few months with a possible hike by mid-year.
"That's when rates will start to head higher, mainly again on the back of the boost to national income and the boost to business investment."

Source: http://news.smh.com.au/breaking-news-business/rates-to-rise-later-in-2011-economists-20110301-1bcvp.html