The Reserve Bank is today tipped to hike interest rates by 0.25 percentage points at its first board meeting of the year.

It comes after the consumer price index (CPI) — the measure of inflation — rose to a 32-year high of 7.8 per cent.

Economist and managing director of Market Economics, Stephen Koukoulas, expect a rate hike of 0.25 percentage points today, but says the Reserve Bank’s “track record is not great”.

Press PLAY below to hear Mr Koukoulas’ predictions

“Yesterday we saw the retail sales numbers coming out for Australia and we consumers, we’re not silly, we’re responding to these cost of living pressures … retail spending went backwards in the December quarter,” he told Ross and Russel.

“If they do follow through with another two rate hikes there is a risk that once we get to the middle of this year … the wheels will have fallen off, the economy will be weakened and we’ll be going ‘Whoops, we did a bit too much too late’ and then, this is what the market is actually starting to price in – rate cuts in late 2023 and 2024.”