Dr Richard Denniss

Now, I understand this is a really difficult time for households who are already facing higher fuel prices and other cost of living pressures, but we must get on top of inflation now so that it doesn't get away from us.

Developments in the Middle East remain highly uncertain, but under a wide range of possible scenarios, the conflict adds to global and domestic inflation.

Australians are poorer because of this shock.

We are poorer and there is no way out of that.

Look, it was a brutal decision.

I think it was an unnecessary and incorrect decision.

And, you know, one thing I agree with the RBA governor about is that this decision to increase interest rates will have no impact on inflation for the next six months.

I'm not verbaling her.

That's literally what she said.

These interest rate rises are not going to do anything for inflation in the next six months.

That's done and dusted.

We know that those prices are coming through.

Obviously, inflation at the moment is being caused by Donald Trump unilaterally starting a war in the Middle East and driving up world energy prices.

The RBA are not stupid.

They know that increasing people's mortgage interest rates will do nothing to lower the world price of oil, but they've decided that they better increase interest rates anyway because they don't want what they call inflationary expectations to speed up.

So yeah, I agree with the RBA governor.

This won't help for the next six months, but she's actually saying, but if I dish out enough pain now, it might come in handy in six months' time.

And it can't hurt, she says, having just heard us.

Well, firstly, because the Reserve Bank has what it thinks is one job.

Its one job is to target inflation of 2.5%.