A rate rise would be the first since May from the Reserve Bank of Australia.
There is a 70 per cent chance of the Reserve Bank of Australia (RBA) increasing the interest rate when it meets on Tuesday (October 5th).
This is according to financial market predictions and economists have forecast that tightening will continue into next year, the Australian reports.
A 0.25 per cent rate hike, which is the level under discussion, would put the official cash rate up to 4.75 per cent.
According to the publication's economic survey of 20 industry experts, the majority believe the organisation will take more action over the next year and the most common prediction is that there will be at least three moves by June 2011.
Bank of America-Merrill Lynch Australian chief economist John Rothfield said: "We are looking for a slowdown in housing prices as well, probably five to ten per cent."
This news comes after the RBA met earlier this month and declared that home loans were about right in May - when it last upped the interest rate - but Aussie credit conditions remain difficult.
By Emma North
