Australian households fear double whammy of rate hikes and higher petrol prices will lead to recession
https://www.theguardian.com/business/2026/mar/17/australian-households-fear-double-whammy-of-rate-hikes-and-higher-petrol-prices-will-lead-to-recession
28 Comments
It’s bluntly targeting the people who are impacted most heavily by the cost of living crisis (renters and mortgage holders). Retirees and people who own their own homes will continue to spend, creating a 2 tiered economy, even if a recession is masked by the data.
RBA making the exact same dumb decision they made last time prices went up. How can they not realise inflation has multiple causes? Raising rates is not the only way to change prices ffs.
It does confuse me when people who really should know better can’t get their heads around the idea that there is household spending that we have a choice about and spending that we don’t. Fuelling the car being the latter. If anything, I would’ve thought the current level of petrol pricing would drive spending in just about all the other areas down.
I am afraid it could be far worse than just high petrol prices. Just like Thailand we are likely to have fuel rationing by end of March once governor general declares a national fuel emergency under the Liquid Fuel Emergency Act 1984.
‘Oil is a global commodity. When 20% of the world’s supply vanishes, the competition for the remaining 80% becomes a bidding war….all countries will pay exorbitant amount for fuel to cover defense, food production/transport, essential services as that is critical for their survival. Private cars are the least priority.
For example a single Japanese naval destroyer or a fleet of long haul trucks transporting food and medicine consumes far more fuel in a day than thousands of private civilian cars and these critical services for every asian country are essential for a countries survival thereby will pay far more for fuel than Australian private cars. There is no simple solution of just paying more for fuel.
Ration fuel, work from home. Don’t travel unless you need to
Sounds pretty simple.
They can make interest rates 99%, it won’t make essentials any cheaper to source or produce.
People can’t stop going to work, or buying food and medicine, or paying for a house.
I think RBA may have stopped being useful – in its current guise.
Govt / legislation needs to be over-hauled. To better serve the populace.
It is absurd how fast the RBA is to pull the trigger on interest rates whenever something happens abroad. What an excuse. Disgraceful.
It’s an insane decision. Everyone was already feeling the pinch from crazy inflation and then petrol surging on top of that, and they decide we need an interest rate hike? At the same time that health insurance premiums went up by like 4%??
Why do they keep hitting the low & middle income earners?
Rate hikes cannot be the only lever. It’s causing more hardship for those already impacted by cost of living. Someone suggested instead increasing mandatory super contribution by the same amount – I would really like to see some modelling done to see if this would be a better option for people rather than lining banks’ pockets.
I don’t fear it, I know it. Just hoping the rich with their money invested get hit harder than me on the way down.
The main fear is a wage price spiral where increased prices lead to higher wage demands.
But in today’s largely non unionised workforce, and knowledge of past wage price spirals, I don’t see that happening today even absent an interest rate rise.
Workers will demand a pay rise to compensate. Employers be like, “Nah mate, it’s just the Iran war, you get a 1% raise and that’s it”.
And workers will absolutely suck it up and head back to work because there’s no longer any threat of strikes or industrial action like in the olden days.
So yes, I think the latest rise is not really necessary.
We’re in a per capita one already.
5 different emails this week of prices increasing for various household essential services. Oh and look the valuer general is pleased to announce that my land value has doubled so they can charge double the rates!
I know there are worse off… but for fuck sakes. Struggling enough as it is even with making wise decisions years ago. When does it pay off?
Should’ve just bought a caravan and been a wanker influencer family on YouTube.
They only have one lever to pull. If we were smarter and more courageous then we’d have a federal land or asset tax we could move up and down when needed. That way the pain is more evenly distributed, the impact is higher, and the money goes to the Budget rather than the banks.
Let it burn. 🏄🏼♂️
Those with paid-off houses are spending large, so *of course* it’s the mortgagees and renters who are not doing that that are being punished for it.
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We are already in one it just hasn’t been announced.
What I don’t understand is what happens to small business when people stop spending? Cause the hospitality sector is already on the brink cause people aren’t spending.
…. It was also a choice to buy a house at historically low interest rates and at a historically high peak in the market….
People aren’t worried about a recession, they are worried about having to decide if they would rather have food on the table or a roof over their heads.
I’d be more than happy to go back to working from home – most productive time of my career
Well I mean during an oil shock where you expect inflation and lower growth the rba will generally intentionally tank the economy in favour of controlling inflation. Ideally they’ll walk a tightrope if possible but a recession is probably more manageable than more persistent inflation on top of what we’ve already had.
Why didn’t RB raise interest rates when housing prices were doubling to cool off the housing market prices. Now cost of living is rising, people are going to have trouble with their massive mortgages for over priced housing so RB raises interest rates when people are financially stressed ? I don’t see the logic
Who would’ve thought that when prices of a commodity shoot up by almost 50%, you’d trigger a recession.
I mean governments could spend less money and avoid the inflationary pressure there. But nobody wants to talk about that.
Do households really fear a recession? Or do they fear high costs negatively impacting their day to day life and their plans for the future? I would guess most people don’t give a crap about the word recession, while they care a lot about how much of their income they spend just existing.
User name is accurate