20/03/2026
There’s a lot of noise around interest rates, fuel prices, and inflation right now. We’ve had a number of clients asking what it actually means in real terms – so here’s a simple breakdown.
This week, the Reserve Bank (RBA) raised interest rates by another 0.25% – the second increase in a row. Combined, the recent 0.5% rise is adding around $210 per month to the average mortgage.
At the same time, fuel prices have surged by more than 60% in recent weeks following the conflict in the Middle East, with no clear relief in sight. For many households, this is the equivalent of another interest rate hike – adding $100+ per month to everyday costs.
There is significant uncertainty ahead. If oil prices reach $100 per barrel, inflation could rise from the current 3.7% to around 4.5%. At $120 per barrel, inflation may push closer to 5% as higher costs flow through the economy.
Primary producers are also feeling the pressure, with fertiliser prices increasing by up to 35%. Urea – the world’s most widely used nitrogen fertiliser – is heavily supplied by the Middle East, accounting for around 45% of global exports.
With inflation expectations rising, households could see costs increase by as much as 5.5% over the next 12 months.
While the Australian economy has remained resilient in recent years, the current environment presents new challenges.
Both businesses and households will need to stay flexible and ready to adapt as conditions continue to shift through 2026.
