I was wrong. The Reserve Bank has put up official interest rates this afternoon by 0.25 per cent to 4.5 per cent.

A couple of things to come out of the statement;

• the RBA says that rates are back to their average level for a normal economy. That tends to indicate the RBA is happy to be back at this level and will probably stay there for a little while barring any surprises.

• the report also said that while inflation seems to be moderating, the RBA doesn't expect inflation to fall as much as they expected and is likely to stay at the upper end of the 2-3 per cent target band which the central bank is comfortable with. If inflation does spike up above 3 per cent the RBA would rates further to try and bring it down.

All eyes will now be on next week's Federal Budget to make sure the Government does its bit to keep the economy "normal". That means cutting back stimulus spending and other costs.

If the economy shows signs of heating up then rates will rise again to cool it down.

There are a number of leading economists predicting official interest rates will be 5.25-5.5 per cent in 12 months. That's almost 1 per cent higher than now.