The Australian economy has growing pains. The September quarter GDP recorded a rise of 0.4 per cent, which came in below expectations. But despite that the economy is growing at its fastest annual pace in two years. A closer look reveals its the private sector doing some of the heavy lifting. The data follows hot October monthly inflation numbers, which saw prices pick up 3.8% in the year to October. The GDP data underlines expectations that the next move in interest rates will probably be up. Financial markets are pricing in a 60 per cent chance of a hike by mid next year and 100 per cent chance of a move higher by the end of 2026. BetaShares chief economist David Bassanese was one of the few economists that correctly predicted the RBA would hold in July rather than cut. He says there's still a chance the RBA will cut again next year in May taking the cash rate to 3.35 per cent, but concedes it could wither way depending on what inflation does. Julia Lee also joins the program to discuss this week's market moves and the prospect of a US rate cut next week. Close of Business is hosted by Alicia Barry.
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