Aussies spend more as fuel crisis pushes up prices, leaving RBA in 'really hard situation'

April 15, 2026 - 07:58

Australian households are opening their wallets despite mounting cost-of-living pressures, according to new economic data. This sustained spending is occurring even as a national fuel crisis drives petrol prices sharply higher, contributing to broader inflationary pressures across the economy.

The resilience in consumer demand, coupled with soaring prices at the pump and elsewhere, presents a significant dilemma for the Reserve Bank of Australia (RBA). Analysts note the central bank is now in a "really hard situation," tasked with cooling inflation without stalling economic activity. The conflicting signals make the timing of future interest rate adjustments particularly challenging.

Financial market expectations for the RBA's next move are finely balanced. Some leading economists argue that acting decisively remains crucial, suggesting that a rate hike in the coming month would represent the "policy of least regret." This view holds that the risks of allowing inflation to become entrenched currently outweigh the risks of moderating demand too aggressively. The RBA's board will weigh these persistent price increases against signs of a softening labor market and broader global uncertainties in its upcoming deliberations.