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Australian homeowners are being urged to prepare for a potential increase in interest rates as the Reserve Bank of Australia (RBA) aims to tackle rising inflation.
This development could spell a triple setback for Australians already grappling with higher costs at the gas station, grocery store, and in their mortgage repayments.
Global oil price surges are significantly impacting fuel prices in Australia, which is contributing to inflationary pressures.
Last month, these conditions prompted the RBA to hike rates, and experts anticipate a similar move in today’s announcement.
Although market predictions for an interest rate rise were initially tentative, the escalating oil prices and geopolitical tensions in the Middle East have made such an increase almost certain.
After the February rise, the markets saw only a 10 per cent chance of a follow-up hike in March. Now, it sees about a 64 per cent chance.
Core inflation has sat at around 3.4 per cent annually, but rose out of the RBA’s target range at the back end of last year.
The current geopolitical situation has only added fuel to the inflation and interest rates fire.
Inflation had already been running too hot, and a significant rise in oil prices will flow through to that data in fuel costs.
Because the RBA is responsible for getting inflation under control, it’s expected to act quickly.
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