Three of Australia's Big Four banks forecast rate rise next week

SYDNEY, March 11 (Reuters) - A ‌growing number of ​economists, ​including from Westpac, National Australia Bank and Commonwealth Bank of Australia, on Wednesday tipped Australia's central bank to raise ‌interest rates next week, following an inflation warning from ⁠a senior official a day earlier.

Market pricing also shifted to reflect a 75% probability ‌that the Reserve Bank of ‌Australia will raise interest rates by 25 basis points to 4.1% next Tuesday as a war in the Middle East pushed ​up oil prices and fuelled inflation risks.

In an interview with news outlet The Conversation, RBA Deputy Governor Andrew Hauser warned that ⁠the spike in oil prices would push inflation higher, adding that he expected a debate among ​the board about whether or not to raise rates next week.

"We view the balance of probabilities has shifted ​given recent commentary and we now expect ‌the RBA to hike the cash rate in March and May," said Belinda Allen, head of Australian ⁠economics at Commonwealth Bank of Australia, the country's most profitable "Big Four" lender.

The RBA was forced to raise rates to 3.85% last month as inflation reaccelerated ⁠after three reductions last year. Headline inflation was at 3.8% in January, with the ​trimmed mean measure edging up to 3.4%, above the target band of 2% to 3%.

Phil O'Donaghoe, chief economist at Deutsche Bank, had thought the volatility associated ‌with the Iran war meant the risk of a March hike had dissipated.

"Our read of Hauser’s remarks ‌is that this conclusion was the wrong one," he said. "An amplification of ⁠the conflict in coming days ‌could still prompt a ​pause, but our base case now is for a hike."

(Reporting by Stella Qiu; Editing by Christian Schmollinger and ‌Thomas Derpinghaus)

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