Top economist Bill Evans forecasts 0.5 per cent October interest rate rise

A fifth consecutive interest rate hike from Reserve Bank of Australia governor Philip Lowe is imminent, a top economist is predicting.

Rates will rise by another half a per cent in October, a top economist has predicted.

Highly regarded numbers man Bill Evans revised up his forecast on Monday, based on recent comments by Reserve Bank of Australia governor Philip Lowe.

“There were significant remarks in the Parliamentary hearing on Friday that suggest he will err on the side of a higher rate before deciding to scale back the pace of tightening,” Mr Evans said in a research note.

If Mr Evans’ predictions plays out, it would be the fifth 50 basis point increase in a row, taking the cash rate to 2.85 per cent.

RBA governor Philip Lowe speaks during a House of Representatives economics standing committee hearing at Parliament House. Picture: AAP Image/Lukas Coch

He said he now believes the cash rate will hit a peak of 3.6 per cent early next year, via further 25bp hikes in November, December and February.

His previous forecast was a ceiling of 3.35 per cent.

Mr Evans said: “The November and February increases will be in response to ongoing evidence of sustained inflation pressures in the September and December inflation reports.

“Clear evidence of the expected slowdown in inflation will not be apparent until late February, allowing the RBA to go on hold in March on evidence that growth is slowing and that inflation and rates have also peaked in the US,” he said.