Whoever wins the election will inherit an economy growing at well above its sustainable rate, making further interest rate rises inevitable according to the latest Westpac Melbourne Institute leading economic index.

The index purports to predict economic growth three to nine months into the future. It came in at 6.7 per cent in May, down from April's 7.5 per cent but still way in excess of Reserve Bank's view of a sustainable rate, believed to be about 3.25 per cent.

Driving the growth are improving international conditions and near-record minerals prices, but so extreme is the prediction that Westpac's chief economist says he doesn't fully believe it. Read more »

And he doesn't think much of Tony Abbott's economics - more on that below

The Reserve Bank has prepared the way for a extraordinary mid-campaign rate hike, spelling out in unprecedented detail the triggers that will make it move when its board next meets in 13 days time.

The board's minutes - released as the Coalition declared interest rates central to its campaign - for the first time include a staff forecast of the inflation rate the Bank expects when the official figures are released next Wednesday and say if it is not met a hike is on the cards. Read more »

The policy economist par excellence hits back:

One of Australia's leading academic economists and a member of the Reserve Bank board has taken on Treasury boss Secretary Ken Henry accusing him of failing to consult experts while trying to silence them.

Warwick McKibbin, director the Australian National University's Research School of Economics said he was stunned by a call from Ken Henry on Monday for academics to "put down their weapons" rather than nitpick over government proposals such at the emissions trading scheme. Read more »