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Why the RBA is predicted to deliver a third straight interest rate hike this week

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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 economist at Deutsche Bank, understands mortgage holders’ frustration.…

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