Economists attribute this latest move to the stronger-than-expected climb in inflation, and Westpac Economist Bill Evans told ABC radio today the booming CE market was one factor influencing the RBA's decision.

Banks are expected to pass on the rate rise to customers as early as today or tomorrow, which will see average standard variable mortgage rates jump to 8.32 per cent.

The rate increase comes as little surprise, with economists having widely tipped the rate rise which is after higher-than-expected annual inflation rate figures for the June quarter. Numerous economist polls by organisations including AAP and Reuters found an overwhelming majority of economists expected rates to rise to at least 6.5 percent, with only a handful tipping rates to remain unchanged after today's meeting of the RBA.

The rates hike is the fifth since the 2004 election. The decision came after the US Federal Reserve announced it was keeping its own interest rates steady at 5.25 per cent for the ninth time.

That decision came against a backdrop of volatile financial markets and rising default rates in the US sub-prime mortgage market.