Financial markets have lowered their expectations for interest rates rises, amid renewed concerns about the sustainability of the global economic recovery, reports The Australian Financial Review.

The market is factoring in 1.63% of rate increases over the next 12 months, down from 1.87% a week ago.

The RBA said in the minutes of its August policy meeting that it would adopt a less expansionary stance if the economy continued to recover.

However, it also warned that there was a risk of an early tightening choking off confidence - signaling to most economists that it was in no rush to raise rates.

“This is not the environment you would be expecting rapid-fire rate rises given some of the concerns the Reserve Bank has about the outlook for household spending in the second half,” CBA chief economist Michael Blythe said.

ANZ senior rate strategist Tony Morriss said the RBA would wait until the March quarter next year to raise rates.