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Remember when we thought interest rates would fall? Ha.

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The latest inflation figures have caused some economists to consider if rates will rise again.

For the last few months interest rate talk has centred around when rates would drop. Since May 2022 the Reserve Bank of Australia has increased the national cash rate 13 times. The cash rate went from a record low of 0.10% to where it sits now, 4.35%.

The job of rising rates was to lower inflation. Which they did. And then economists began talking about when interest rates would fall. We even wrote about it.

But now, economists are warning the opposite. After the latest Consumer Price Index (CPI) came out, there were concerns it isn't falling fast enough. The CPI came out at 3.6%. So prices, the cost of things we pay for, have risen by 3.6% in the year to March. That's the lowest annual change since December 2021.

It's so close to the RBA's target range of 2-3% (prices should never be doing down year on year, as much as we'd all love that), but economists are worried. The quarterly change, from the 3 months to December compared to the 3 months to March, rose by 1%. That was higher than it should have been.

Commonwealth Bank's chief economist Gareth Aird wrote in an economic update recently that "the commencement of an easing cycle is likely to be delayed". In other words, rate cuts may not be as soon as we thought.

Let's pull it back to now. What's happening with the May cash rate decision?

In case you're new here, Finder surveys a panel of economists ahead of every RBA decision.

For the May decision, every single one of our 36 respondents was confident the cash rate would not move.

Although the latest inflation figure has some people worried, economist Geoffrey Kingston from Macquarie Business School believes that for now the RBA will "probably sit on its hands".

For now.

Then he expects a rate rise.

"Ongoing high government spending and the July tax cuts may combine to force a rate rise sometime this summer," Kingston said. That's because prices are

Does anyone still think we could get a rate cut this year?

Yes! Several economists believe there will be a rate cut this year – just a bit later than originally predicted.

Most economists felt that there would be a rate cut around September, but the majority are now saying December. Some have pushed their prediction back even further to February 2025.

Shane Oliver, economist at AMP, had originally expected a rate cut as early as June, but he now believes it will be at the end of the year.

"Inflation is still coming down so we still expect a rate cut this year, but March quarter inflation was higher than expected particularly for services inflation and so we have delayed our expectation for the first rate cut to year end," Oliver said.

The likelihood is that the RBA will hold the cash rate at next week's meeting, while it monitors the trend of inflation. It's likely too early to jump to another rate rise, but as Kingston said above there are a few factors that could see inflation start rising again over the next few months, and then the RBA may need to act again.

For now, we wait and see.

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