Well the money's on and according to the financial market bookies, the futures markets; it's odds on in the view of the market that the Reserve Bank will lift its key cash rate to 7% today.
The RBA board meets in this morning and the announcement of the decision and a short statement will be issued at 2.30 pm.
According to AAP 17 of 19 economists surveyed reckon the RBA will lift rates while Bloomberg says 24 of 27 economists in its survey believe rates will rise today.
Leading investment banks, such as Merrill lynch say rates will rise, but Goldman Sachs JBWere says it is too close to call and believes there's a good chance the rate rise won't happen.
Macquarie Bank's interest rate strategist, Rory Robertson is another who believes rates won't necessarily rise.
Some commentators reckon the bank has room to sit and watch for a month to see if the recent market volatility returns. But stockmarkets have calmed down and the multi-billion dollar plays for Yahoo in the US and Rio Tinto in London and Australia are showing there's renewed confidence among investors.
The push for higher rates though was boosted by the TD Securities/Melbourne Institute inflation gauge yesterday which signalled that inflation is not slowing.
It said there was another rise in prices in January, with a lift of 0.3% to an annual rate of 3.9%.
This is well above the RBA's target range of 2%-3% and is the highest annual pace since May 2006 when oil and commodity prices were rising rapidly, along with the price of bananas.
The RBA has its own measures of inflation: the trimmed mean and according to TD Securities version of this measure of inflation rose 0.2% January and by 4.0% over the year.
That's higher than the RBA's own measures (and its weighted mean measure) which are just over 3% at the moment.
TD Securities says last year's inflationary pressures have continued into the new year. That is not 'new ' news. The RBA forecast that last November.
But there are suggestions the rate in the TD Securities measure could be higher than the 3% to 3.5% rate seen by the central bank over the first few months of 2008.
The statement today could update the forecasts, but the bank's first Monetary Policy Statement for the year will be released next Monday and will contain far more up to date forecasts for the year and into 2009.
A move to 7% for the cash rate would push most variable home loan rates above 9%. The banks all boosted rates in early January by between 0.12% and 0.20% and if there's a reason why the bank doesn't move, it could be that increase, plus the widespread rise in credit costs in recent months.
TD Securities said that contributing most to the January increase were price rises for utilities, financial services, automotive fuel and education.
They were partially offset by falls in the prices of holiday travel and accommodation, and fruit.
The price of fuel for the year to January rose by 25%, while the price of rental accommodation rose by 9.1%.
TD Securities said that most of the inflation pressure is coming from domestic sources, with the yearly non-tradeables component exceeding 5%.
The firm's Joshua Williamson said the high result for the January gauge showed that inflation remained problematic.
"This may seem odd at a time of US interest rate cuts, but Australia is more integrated with Asia than the US now.
"The Asian economies that are important to Australia are tightening economic policies to manage strong growth and rising inflation."
The RBA last increased rates on November 7, two weeks after the September quarter CPI showed annual core inflation was 3.1% in the quarter.
That rate rose in the December quarter with the core inflation rate rising to 3.8%.
Employment rose for a 14th straight month in December (and is not expected to change in next week's update), while retail sales and building approvals have been firm to solid. Both will be updated later this morning when December figures are released from the Australian Bureau of Statistics.
