If turbocharged petrol prices are driving up inflation, then why are Australia’s unemployed on the line? | Greg Jericho
News Source
•Wed, 30 Sep 2026 15:00:48 GMT
📰 What Happened
A columnist argues the Reserve Bank is raising interest rates to fight inflation caused mainly by petrol prices. Petrol rose because of the war on Iran, and the writer says that without it inflation would have fallen. The RBA lifted the cash rate to 4.6 percent and may go higher. Columnist Greg Jericho says the bank cares more about inflation than about full employment.
🔍 The Backstory
The RBA has two goals: stable prices and full employment. After the hike, the ABC's Alan Kohler said the bank really follows only the inflation goal. Markets now expect a rise to 4.85 percent by March. Jericho points out that past recessions cut full-time jobs for men and took a decade to recover. Household spending fell in August once petrol was removed.
🎯 Why It Matters
Higher rates raise repayments on home loans and stretch family budgets. If the bank accepts a recession to slow prices, that could mean lost jobs for ordinary workers. That trade-off touches almost every household.
A columnist argues the Reserve Bank is raising interest rates to fight inflation caused mainly by petrol prices. Petrol rose because of the war on Iran, and the writer says that without it inflation would have fallen. The RBA lifted the cash rate to 4.6 percent and may go higher. Columnist Greg Jericho says the bank cares more about inflation than about full employment.
The RBA has two goals: stable prices and full employment. After the hike, the ABC's Alan Kohler said the bank really follows only the inflation goal. Markets now expect a rise to 4.85 percent by March. Jericho points out that past recessions cut full-time jobs for men and took a decade to recover. Household spending fell in August once petrol was removed.
Higher rates raise repayments on home loans and stretch family budgets. If the bank accepts a recession to slow prices, that could mean lost jobs for ordinary workers. That trade-off touches almost every household.