The Hormuz hike: why the RBA is predicted to deliver a third straight interest rate rise this week

While interest rate rises can’t affect the surging price of oil caused by Middle East turmoil, they are still the Reserve Bank’s best – and only – tool to fight inflation Follow our Australia news live blog for latest updates Get our breaking news email, free app or daily news podcast One economist is calling it the “Hormuz hike”. There’s a nearly 80% chance that the Reserve Bank will deliver a third straight interest rate rise on Tuesday, according to financial markets. Higher interest rates are always unwelcome for the roughly 3.6m households paying down a mortgage. But a rate rise this week would be particularly galling. Slammed with higher petrol prices and the broader cost-of-living grind, more than one homeowner will be wondering how paying more interest on their loans will do anything to fix the root cause of the latest inflationary pulse: the Middle East conflict. Official figures released last week showed inflation jumped by almost a percentage point to 4.6% in the year to March and the highest in two and a half years. But the more than 30% spike in petrol prices in the month accounted for most of the month’s inflationary uplift, the data showed. Phil O’Donaghoe, the chief