Australia's Central Bank raises lending rate

Australia's Central Bank has raised its key interest rate by a quarter percentage point for the second month in a row, declaring the global downturn over and warning that inflation is set to rise.

The rate now stands at 3.5 percent. The decision on Tuesday was widely anticipated by analysts, and underlines Australia's quick recovery compared with other developed countries. Most have yet to respond to signs the global economic downturn has eased by raising borrowing costs.

A month earlier, Australia became the first major economy to raise interest rates since the outbreak of the financial crisis, when the bank hiked its key rate by a quarter point from a 50-year low.