The Reserve Bank of Australia increased the official interest rate today and warned conflict in the Middle East could worsen inflation. Here’s what Bond University experts say the decision means for mortgages, petrol prices and grocery bills.
Associate Professor Simone Kelly – finance expert
“When costs rise quickly, households tend to adjust almost immediately, cutting discretionary spending, delaying non-essential purchases and becoming more cautious about taking on new debt.”
“Even as inflation begins to ease, many households still feel under pressure because overall prices remain high and wage growth often lags behind the rising cost of everyday essentials.”
“The rapid spike in global oil prices indicates we may be in for an experience similar to the OPEC oil crises of the 1970s, where energy price shocks filtered quickly into broader living costs. The longer the current conflict continues, the greater the domestic pressure households are likely to feel, particularly through higher petrol prices and increased costs across the supply chain.”
Associate Professor Alex Acheampong – energy economist
“We are already seeing volatility in global oil markets, and any disruption to key shipping routes could push petrol prices higher quite quickly. Consumers and businesses, particularly small businesses, tend to feel that impact within days at the pump.”
“If the situation escalates or continues, higher fuel costs will begin to flow through supply chains, lifting the price of food and other essentials over the coming weeks and adding to inflationary pressure.”
Associate Professor Rajat Roy – consumer behaviour expert
“We are likely to see shoppers switching from major brands to home-brand products, comparing prices across supermarkets and cutting back on discretionary items like snacks, alcohol and takeaway meals.”
“Consumers become far more strategic when budgets tighten, shopping across multiple supermarkets, choosing home-brand options and waiting for discounts while reducing non-essential spending.”