Car sales increase 'could see interest rates rise'

Interest rates could rise for the third successive month in December, it has been suggested.

Consumers may wish to prepare their finances for another interest rate increase following news of a rise in car sales.

As the Australian Bureau of Statistics revealed the number of vehicles sold in October has gone up by 3.7 per cent, CommSec economist Savanth Sebastian points out such data could be used by the Reserve Bank of Australia (RBA) to put up the cash rate for a third successive month.

Indeed, he points to claims by the RBA that their decision will be "data dependent" and reports of a rise in car sales may give them the "confidence the economy is on the mend", the Australian Associated Press reports.

"They've never raised rates three months in a row before and if there's a month when it's likely to happen December would be it," Mr Sebastian states.

Following the interest rate rise from 3.25 to 3.5 per cent earlier this month, Westpac announced that rates on its credit card and saver account products would also increase by 25 basis points.

By Bret Clement