Australia, South Africa and New Zealand raise rates as oil‑price shock fuels inflation

The Reserve Bank of Australia lifted its cash rate by 25 basis points to 4.35 %, citing higher fuel prices and broader inflation pressures from the Middle‑East conflict. In South Africa, the SARB increased the repo rate to 7 % and the prime lending rate to 10.5 % as oil prices surged above $100 a barrel and global uncertainty raised inflation‑risk concerns. New Zealand’s Reserve Bank left the Official Cash Rate at 2.25 % after a split vote, but officials warned that a rate rise is likely “sooner rather than later” because the Middle‑East oil shock could become embedded in inflation expectations. In the United States, Federal Reserve officials – including Vice‑Chair Michelle Bowman and Minneapolis Fed President Neel Kashkari – signalled that persistent Middle‑East‑driven price pressures could force a future rate hike, noting that inflation remains well above the 2 % target and expectations are drifting higher. St. Louis Fed President Alberto Musalem added that any productivity boost from artificial‑intelligence growth cannot be relied on to tame current inflation. Earlier, the Fed had cut its policy rate by 25 bps to a range of 4.00‑4.25 % in September 2025, a move that lifted U.S. bank shares and prompted comments on its impact for Irish investors and borrowers. Across these economies, central banks are tightening or preparing to tighten monetary policy in response to elevated inflation driven by higher oil prices and global geopolitical shocks.