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SYDNEY, June 9 Reuters The risk of Australia39;s economy slipping into recession has risen sharply, after the central bank surprised markets this week by raising rates and warned it could tighten again to tamp down on high inflation even at the cost of preserving jobs.

For a year, Reserve Bank of Australia Governor Philip Lowe has been talking of successfully navigating a narrow path to lower inflation while keeping unemployment near 50year lows.

But this week the governor39;s tone changed.

After a surprise rate rise to 4.10 and a hawkish promise of even more to come, Lowe warned the narrow path would also be bumpy and that getting high inflation down would take priority over preserving jobs.

The shift led economists, some who thought rates had peaked at 3.6 when the RBA paused its tightening cycle in April, to factor in at least one more rate rise and a genuine risk of a recession, the nation39;s first in more three decades outside the sharp downturn at the start of the COVID pandemic in 2020.

Combined with the hikes already delivered, we see this as likely stalling the economy… with a high risk of outright recession, said Paul Bloxham, HSBC39;s chief economist for Australia, New Zealand and Global Commodities.

He expects quarterly growth to average just a 0.1 over the next four quarters, with a…