Australia's retail sales climbed more than economists forecast in September, reinforcing speculation the central bank will raise interest rates next week.

Sales advanced 0.8 percent, matching the revised August gain, the Bureau of Statistics said in Sydney today. The median estimate in a Bloomberg News survey of 23 economists was for 0.5 percent.

A hiring boom and higher wages prompted consumers to spend more on furniture, electronics and food at retailers including at Harvey Norman Woolworths and JB Hi Fi.

 A fourth monthly gain in sales, and reports yesterday that showed housing approvals jumped to a 14-month high and lending expanded in September, suggest the central bank will increase rates for a second time this year to curb inflation.

"The economy is on fire,'' said Joshua Williamson, senior strategist at TD Securities Ltd. in Sydney. "The Reserve Bank has enough reasons to raise interest rates, not just once, but at least twice and possibly three times in the next six months.''

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