Economists at Commonwealth Bank of Australia tip a February rate hike

SYDNEY, Dec 16 (Reuters) - Economists at the Commonwealth Bank of Australia now expect the Reserve Bank of Australia will hike interest rates in February next year as inflationary pressures pick up amid a capacity constrained economy.

"We see a rate hike as necessary to bring the economy back into balance and help return inflation back to its target," said Belinda Allen, head of Australian economics at the CBA, in a note to clients on Tuesday.

"But we don’t expect a large hiking cycle, only fine tuning by the RBA and see the cash rate sitting at 3.85% at the end of 2026."