Plea for spending cuts as banks tip interest rate hikes

Rate hikes are on the cards, say economists who urge a trim of government spending to ease demand. (Bianca De Marchi/AAP PHOTOS)

Economists have urged Treasurer Jim Chalmers to show greater spending restraint to take some heat out of the economy and spare Australians from more interest rate hikes.

With the economy already pushing up against its speed limit, a modest recovery in growth has driven inflation above the Reserve Bank's comfort zone, economists at NAB and Commonwealth Bank said.