{"id":323535,"date":"2026-03-11T04:28:08","date_gmt":"2026-03-11T04:28:08","guid":{"rendered":"https:\/\/www.newsbeep.com\/nz\/323535\/"},"modified":"2026-03-11T04:28:08","modified_gmt":"2026-03-11T04:28:08","slug":"australians-hit-by-soaring-petrol-prices-now-face-expected-blow-of-interest-rate-rise-interest-rates","status":"publish","type":"post","link":"https:\/\/www.newsbeep.com\/nz\/323535\/","title":{"rendered":"Australians hit by soaring petrol prices now face expected blow of interest rate rise | Interest rates"},"content":{"rendered":"

Millions of Australians could be hit with the twin blow of soaring petrol prices and higher mortgage repayments amid rising expectations that the US-Israel war on Iran<\/a> will force the Reserve Bank to hike rates on Tuesday.<\/p>\n

A growing number of economists predict that the RBA board will increase the cash rate to 4.1% at the conclusion of its upcoming two-day meeting, after the central bank\u2019s deputy governor, Andrew Hauser, said data had \u201cconfirmed even more decisively \u2026 that our economy currently has limited spare capacity\u201d.<\/p>\n

Hauser, speaking to the Conversation\u2019s Michelle Grattan<\/a>, said: \u201cFurther increases of prices from Iran, if that is what we end up seeing \u2013 and that is a big if \u2013 is not a helpful development<\/a> from the perspective of our policy discussion.\u201d<\/p>\n

Bets on a March rate hike surged after Hauser\u2019s comments, with financial markets now pricing in a 64% chance of back-to-back rate hikes after the February move.<\/p>\n

Analysts at Westpac and NAB said they now anticipated rate rises at the next two RBA board meetings, which would reverse the trio of cuts delivered last year when inflation dropped as low as 1.9% before price pressures reaccelerated through the second half of 2025.<\/p>\n

Westpac\u2019s chief economist, Luci Ellis, said that soaring oil prices had a \u201clarge but temporary\u201d impact on inflation, but that the central bank would \u201cnevertheless feel compelled to act\u201d.<\/p>\n

\u201cThere are good arguments for staying on hold until May given the temporary nature of the shock and the possibility of more extreme market instability.\u201d<\/p>\n

George Tharenou, the chief economist at UBS, said the market had been caught out by Hauser\u2019s \u201chawkish\u201d comments, and that it appeared that the central bank\u2019s economists would be recommending a rate rise to the board.<\/p>\n

Sign up: AU Breaking News email<\/a><\/p>\n

\u201cBut we expect this recommendation to be thoroughly debated by the RBA\u2009board and hence do not expect a unanimous vote to hike,\u201d he said.<\/p>\n

Petrol prices<\/a> in Sydney and Brisbane averaged $2.18 a litre on Tuesday, $2.16 a litre in Melbourne, $2.12 in Canberra and $1.94 in Perth, according to Motormouth.<\/p>\n

That has pushed average weekly petrol bills to a record high of more than $73.15 and up nearly 25% from the February average, according to AMP analysis assuming a typical household using 35 litres a week at $2.09.<\/p>\n

A graph titled \u2018Petrol pump pain\u2019 showing fuel bills rising<\/a><\/p>\n

Reflecting the climbing potential for higher interest rates, the Australian dollar pushed higher to 71.6 US cents, in defiance of turmoil in global financial markets that would normally trigger selling in the Aussie.<\/p>\n

There have been wild gyrations in energy markets<\/a> as traders react to often conflicting statements from Donald Trump about when the new Middle East war will end.<\/p>\n

The Brent crude international oil price benchmark climbed to nearly US$120 this week before collapsing to US$88.23 in Wednesday afternoon trade, according to Bloomberg \u2013 still 40% higher than at the start of the year.<\/p>\n

Hauser in his interview said the central bank was updating its inflation forecasts in response to the shock of higher energy costs, \u201cbut it clearly is the case that it\u2019s an upside risk to that projection in February\u201d.<\/p>\n

With financial markets now pricing in the potential for a third rate hike by November, the deputy governor said inflation at 3.8% was already \u201cwell above our target range\u201d of 2% to 3%.<\/p>\n

But he said the board would also consider the prospect that higher energy costs will weigh on the global economy, which would argue against a rate increase next week.<\/p>\n

\u201cI think there will be a very genuine debate,\u201d Hauser said.<\/p>\n

\u201cInflation is too high. Higher prices don\u2019t help that debate. But there are arguments on both sides and I think if ever there was a time when board members will earn their meagre salary, it will be this month.\u201d<\/p>\n","protected":false},"excerpt":{"rendered":"Millions of Australians could be hit with the twin blow of soaring petrol prices and higher mortgage repayments…\n","protected":false},"author":2,"featured_media":323536,"comment_status":"","ping_status":"","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[11],"tags":[138,219,111,139,69],"class_list":["post-323535","post","type-post","status-publish","format-standard","has-post-thumbnail","category-economy","tag-business","tag-economy","tag-new-zealand","tag-newzealand","tag-nz"],"_links":{"self":[{"href":"https:\/\/www.newsbeep.com\/nz\/wp-json\/wp\/v2\/posts\/323535","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.newsbeep.com\/nz\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.newsbeep.com\/nz\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/nz\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/nz\/wp-json\/wp\/v2\/comments?post=323535"}],"version-history":[{"count":0,"href":"https:\/\/www.newsbeep.com\/nz\/wp-json\/wp\/v2\/posts\/323535\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/nz\/wp-json\/wp\/v2\/media\/323536"}],"wp:attachment":[{"href":"https:\/\/www.newsbeep.com\/nz\/wp-json\/wp\/v2\/media?parent=323535"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.newsbeep.com\/nz\/wp-json\/wp\/v2\/categories?post=323535"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.newsbeep.com\/nz\/wp-json\/wp\/v2\/tags?post=323535"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}