THE NEWS WRAP: RBA hints at August rate rise

Reserve Bank governor Glenn Stevens has given the clearest hint yet that interest rates are likely to rise in August if inflation continues to edge higher.

Speaking at an economist lunch in Brisbane, Stevens said the sharp slide in Australia’s economic output during the March quarter was “more than fully explained” by the fall in coal and iron ore production due to flooding.

He also said that fruit and vegetable prices are returning to normal, as farmers get back up to full production after the floods, which will have a downward impact on inflation.

Solomon Lew poised for Colorado purchase

Reports are circulating that retail king Solomon Lew is the perfect candidate to take on the radically restructured Colorado chain, which killed off more than 1,000 jobs earlier this week due to multiple store closures.

Analysts believe Lew, who has an-depth knowledge of the company, is perfectly placed to bring it back from the brink.

Apartment living to bypass houses

Apartments are tipped to overtake houses as the most common new homes in Australia’s biggest cities as younger buyers and renters trade the traditional backyard for smaller living spaces in inner-city suburbs.

Figures from the Australian Bureau of Statistics reveal that in April this year, there were only 1.6 houses for every apartment, the lowest level to date.

This compares to data from the 1990s, which shows there were three houses approved for every one apartment.

Overnight

The Australian dollar was trading at more than one US cent lower this morning, as traders worry that Greece’s debt crisis could spill over to other economies.

At 7am, the dollar was trading at US105.78 cents, down from US106.88 cents yesterday.