Fund managers are piling into insurers, gold miners and even some more affordable retailers, betting the stocks will be the biggest winners from the Reserve Bank of Australia’s widely expected interest rate rise this week as it battles an inflation problem exacerbated by the Iran war.

Major banks from Westpac to UBS all expect the RBA to raise the cash rate for the third time this year on Tuesday to 4.35 per cent after data last week showed inflation was at 3.5 per cent, well above the central bank’s target. The bond market is pricing in at least two more rate rises by Christmas.

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