The Reserve Bank of Australia (RBA) is expected to hike the official cash rate by 25 basis points to 4.6% at its Sept. 28 to Sept. 29 meeting, driven by a combination of higher oil prices and stronger-than-expected economic data, Commonwealth Bank of Australia (ASX:CBA) said in a report on Monday.

The lender's previous forecast was for a rate hike in November once the full quarterly consumer price index (CPI) confirmed the materialization of upside risks to inflation, its Head of Australian Economics Belinda Allen said.

However, a rate increase beyond the projected one in September is not CBA's base case at the moment, and a move to 4.85% would represent a significant shift towards prioritizing inflation risks and could produce a larger hit to economic growth and house prices. The bank continues to expect 50 basis points of interest rate cuts in 2027, with the first reduction now forecast for August 2027, rather than May 2027, followed by another in November 2027.

Brent crude oil climbed to over $100 per barrel from around $80 in recent weeks, increasing the risk of higher petrol and diesel prices impacting inflation. Recent economic data has also remained stronger than the central bank's expectations, including inflation figures and gross domestic product growth. Recent comments from senior central bank officials also focus on inflation risks.

CBA expects the upcoming labor force figures to show a steady unemployment rate.