Global Food and Energy Costs Rise Amid Middle East Turmoil

Diesel prices have surpassed $3 a litre, while petrol (91) has also seen a sharp rise of almost 50 cents a litre since the start of September. Industry observers warn that prices could reach $4 a litre if global supply pressures and Middle East geopolitical turmoil persist. The Reserve Bank is noting that these higher fuel costs are being passed through to food, road transport, and other goods and services. Separately, fixed mortgage rates are facing upward pressure due to rising global wholesale funding costs, which could move toward 6% for some fixed terms.

The price hikes are driven by geopolitical risk in the Middle East, which affects global supply chains and input costs. The rising costs are being passed through to consumers via food prices and increased operational expenses for businesses. This combination of expensive fuel and rising interest rates is creating financial pressure on households and businesses alike.