Could improving economy see interest rates rise?

As the economy shows signs of improvement, interest rates could rise once more, it has been suggested.

Consumers could soon find rates on credit cards, home loans and other financial products increasing, if comments made in one publication are anything to go by.

An article in the Australian points out that a base rate hike by the Reserve Bank of Australia next week is "seemingly inevitable", claiming that the bank's head - Glenn Stevens - believes that the cuts made earlier were too dramatic.

In a bid to "get out of emergency levels as fast as possible", the publication claims that interest rates will rise by 100 basis points to stand at 4.5 per cent as the country looks to be showing some signs of economic recovery.

However, it was suggested this has been constrained over recent months, particularly since the RBA's rate rise in October.

Indeed, it was claimed several retailers have seen slow sales growth, while increases in Aussie credit usage have been "negligible".

"There is no doubt the Australian economy is performing better then most in the Western world. But there are concerns over the pace of that growth," it was suggested.

Following the RBA's rate increase earlier this month, ANZ Bank announced that rates on its progress saver account were to rise by 35 basis points, with credit card and business lending products up 25 basis points.

By Bret Clement