In a survey by The Australian Financial Review, 33 out of 35 economists tipped the RBA will raise the cash rate next week to 4.35 per cent.
RBA governor Michele Bullock is under pressure to bring the sutbborn inflation rate down.. (Alex Ellinghausen)But nine of the experts predict the cash rate will peak at 4.6 per cent, an opinion held by money markets, which are forecasting two rate rises by September 2024.
They believe inflation sitting stubbornly at 5.4 per cent will require further interest rate hikes from the RBA before it comes down.
"The easing cycle continues to appear further down the track as core inflation remains stubbornly high, and our resilient economy demands a higher policy setting and a longer cycle," said Bendigo and Adelaide Bank chief economist David Robertson.
The former head of the RBA's domestic markets portfolio and current Challenger chief economist Jonathan Kearns predicts interest rates will peak at 4.6 per cent.
"The real policy rate is not as restrictive relative to history or other economies and it has been a deliberate RBA strategy to preserve jobs, but this means it will take longer for inflation to slow to target."
Independent economist Saul Eslake, of Corinna Economic Advisory, said if the RBA doesn't go for a hike next week, it would lead to speculation the board had succumbed to political pressure.
He predicts the RBA will lift interest rates before they settle at a peak of 4.35 per cent.
Former Labor federal minister Craig Emerson was one of only two economists who believe the cash rate will remain unchanged after the meeting.
Last week's data showing a quarterly inflation rise of 1.2 per cent was above market expectations.
