The Reserve Bank of Australia (RBA) has begun to issue warnings. The RBA is now ringing the alarm bells on the huge levels of debt both private and government which, the RBA says, is now the equivalent to the total Gross Domestic Product and around $74,000 for every person in this country. Most analysts have viewed the warning as a sure sign that the RBA will be using this problem as another reason to raise interest rates soon.

Many economists are hopeful that the recent news about the reduction in lending will contribute to the RBA calling a halt to what has been a monthly increase to the basic cash rate. Observers say the fact that recent rate increases have lead to an eight month low in total lending has to have an effect on the next RBA meeting.

While the finance numbers may be down, the RBA will also be influenced by the way the number of new jobs and house prices continue to boom. It is becoming increasingly obvious through the many statistics emerging, that the economy is firing strongly on most cylinders. Certainly, the RBA will have a balancing act to perform when it meets in early February.