SYDNEY, Dec 6 Reuters Australia39;s central bank on Tuesday raised interest rates to a 10year high and stuck with its projection that more hikes are needed to cool inflation, a stance taken as slightly hawkish by markets that were looking for signs of a pause in the near term.

Wrapping up its last policy meeting this year, the Reserve Bank of Australia RBA lifted its cash rate by 25 basis points to 3.1, the eighth hike in as many months and bringing its rate increases to a hefty 300 basis points since May.

All 30 economists polled by Reuters had expected the RBA to go for another modest 25 basis point hike, its third in a row after a succession of halfpoint hikes.

In a statement largely similiar to others of recent months, Governor Philip Lowe said the board expects to increase interest rates further over the period ahead, although he added that it is not on a preset course.

The size and timing of future interest rate increases will continue to be determined by the incoming data and the Board39;s assessment of the outlook for inflation and the labour market, Lowe said.

CBA head of Australian economics Gareth Aird, who had been predicting that rate hikes would pause after December, altered his forecast to add in another rise of 25 basis points in February, taking rates to a peak of 3.35.

The Board has retained a tightening bias, as expected. But the Governor did not soften the key paragraph around forward guidance as much as we had anticipated, Aird said.

The…