Oct. 21 (Bloomberg) -- An Australian index of leading economic indicators rose in August as shares and money supply climbed.

The index, a gauge of future economic growth, gained 1.1 percent to 252.4 points from July, Westpac Banking Corp. and the Melbourne Institute said in Sydney today. The index rose at an annualized rate of 1.7 percent in August, the first increase since September last year.

Central bank Governor Glenn Stevens unexpectedly raised the benchmark interest rate by a quarter point to 3.25 percent on Oct. 6, saying the risk of contraction in the Australian economy had passed. Eighteen of 22 economists surveyed by Bloomberg say he will increase the rate by another quarter point on Nov. 3. Four predict a half-point move and one forecasts no change.

“The Australian economy is moving on to a much stronger growth trajectory in 2010,” said Bill Evans, chief economist at Westpac in Sydney. “A decision to raise interest rates by 50 basis points in November would not be a surprise.”

Westpac’s leading index tracks eight gauges of activity, such as company profits and productivity, to give an indication of how the economy will perform over the next three to nine months. Australia’s benchmark S&P/ASX 200 Index of stocks has jumped 19 percent in the past three months.

The coincident index, a measure of the current state of the economy, was little changed in August at 238.7 points.

To contact the reporter on this story: Tracy Withers in Wellington at twithers@bloomberg.net.

Last Updated: October 20, 2009 19:30 EDT