Recent inflationary figures have shown that the consumer price index rose by 0.9% in the September quarter.  Many market economists were predicting a 0.8% increase.  This puts the annual growth rate at 2.9%, which is at the top of the Reserve Banks 2-3% comfort band.

Westpac Bank chief economist Bill Evans has said that the release of inflationary data has confirmed their forecast.  They are expecting rates to move in November and then possibly again in February or March 2008.

Professor Fariborz Moshirian of the University of New South Wales has said that borrowers need to get used to the idea of continually increasing interest rates.

"Higher interest rates are not only inevitable, but also should become part of Australia's economic environment and the cost of our growing economic prosperity," he said.

"Despite the cuts in interest rates in the US and Europe, all indications are that global interest rates will be higher in 2008 as long as China and India keep growing strongly."

While many borrowers are hoping that the looming federal election may keep a rate rise at bay Reserve Bank Governor Glenn Stevens has repeatedly said that the election will have no impact on the Reserve Bank's decision.  They will move rates if the economy needs it.