* Next move in rates likely up, rather an a decrease - RBA's Kent
* A rate cut cannot be ruled out, if need be - Kent
* Change in market pricing following GDP data "fairly small"
* Oct housing finance jumps after two straight monthly falls (Adds housing finance data, economists comment)
By Swati Pandey and Wayne Cole
SYDNEY, Dec 10 (Reuters) - A cut in Australian interest rates could not be ruled out, a senior central banker said on Monday, but emphasised that the next move was still likely to be an increase given expectations for a gradual acceleration in inflation.
The Reserve Bank of Australia (RBA) has remained patient on policy since last reducing the cash rate to a record low 1.50 percent in August 2016. It has repeatedly cautioned that further cuts will only fuel a debt binge in the country's housing market.
"We have said that it's likely the next move is up, it doesn't mean if it's needed the next move might not be down," RBA's Assistant Governor Christopher Kent said at a Bloomberg event in Sydney.
"But that's not in our forecasts, which are for a gradual fall in unemployment and a gradual rise in inflation. And that's why the next move will likely be up."
Kent sounded upbeat about the overall domestic outlook but noted an "unnecessary" credit tightening by the country's major banks was a threat to activity.
Helping allay some of those fears, though, data earlier in the day showed a surprising jump in housing finance approvals in October after two months of declines. Economists had predicted a flat outcome. solid result was driven by first-home buyers, while the investor segment rose for the first time since February.
"A sustained up-tick in this data will be one of the things we are looking at for evidence of stabilisation (of the housing market)," said ANZ economist Daniel Gradwell.
Australia's property market is now in a downturn after prices in Sydney and Melbourne broadly doubled between 2008 and 2016, forcing regulators to take steps to curb risky lending.
Adding further pressure, a powerful, government-mandated inquiry has rattled Australia's banking sector, forcing major lenders to become extra cautious about writing loans. analysts reckon the recent weakness in the housing finance data could be attributed to "processing delays" as lenders apply more rigorous risk assessments before approving mortgages.
"Note that the picture around housing markets is still unambiguously weak. However, the Oct gain in finance approvals does pare back some of the downside risks that were starting to build around owner-occupier activity in particular," Westpac's Matthew Hassan wrote in a note.
A deep downturn in the property market is currently seen as the single biggest risk facing Australia's A$1.8 trillion ($1.30 trillion) economy, which is in its 28th year of growth without a recession.
Some economists including AMP are now predicting rate cuts next year, fearing falling house prices will weigh on construction activity as well as consumer spending.
Interest rate futures imply a 12 percent probability of a 25 basis point cut in 2019. 0#YIB:
That compares with a feeble chance of an increase just last week before data showed economic growth slowed more than expected to 0.3 percent in the third quarter. described the market move as "fairly small". ($1 = 1.3893 Australian dollars)