Interest rates have been tipped to rise when the Reserve Bank of Australia meets on Melbourne Cup Day.

Some economists believe interest rates could rise by as much as 50 basis points, after the RBA revealed it was becoming increasingly concerned the economic recovery could stoke inflation.

Minutes from the October RBA board meeting reveal that the surprise 25 basis point increase that pushed the official cash rate up to 3.25 per cent was brought on by worries about inflation.

There was however some descent from one board member, believed to be the Treasury Secretary Dr Ken Henry, who argued strongly against any rate rise.

Henry is believed to have argued that the improvements in the economy are largely the result of government stimulus measures and that there is still a danger of the global economy suffering another downturn.

Despite this descent, economists believe official inflation figures, to be released next week by the Australian Bureau of Statistics, would help the RBA determine the size and timing of its next move.

Sources: The Australian, Sydney Morning Herald