Official interest rates are likely to hold steady until Christmas, according to National Australia Bank chief Cameron Clyne.


While Mr Clyne said that the arguments for and against an increase in rates were equally persuasive, he said he believed that that a rate hike would likely be held off until the New Year in an attempt to create a more solid anti-inflation policy.


"I think at the moment, because there is so much data on both cases, we're in a wait-and-see mode, and probably through the end of the year we'll see fairly stable (rates),” Mr Clyne told an Australia Israel Chamber of Commerce lunch in Melbourne.


Mr Clyne said a decreasing consumer and business confidence was going to play a key role in deciding future monetary policy.