Unemployment has plunged to a 13-year low of 4.2 per cent, putting more pressure on the Reserve Bank of Australia to consider raising interest rates sooner than planned.

Economist and managing director of Market Economics, Stephen Koukoulas, says on current tends, “we could well see unemployment below four per cent by the end of the year”.

He expects interest rates to rise this year.

“If I look at the futures market – that’s where the professional money market people place their bets … on where interest rates are going – we are going to be seeing interest rates up by about one percentage point through the course of 2022 and probably another percentage point through 2023,” Mr Koukoulas said.

“So over the next two years expect interest rates to go up about two per cent.”

Press PLAY below to hear Mr Koukoulas’s market predictions