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Most Australians wrongly think rate rises increase inflation, RBA survey finds
A new RBA survey of 9,000 Australians found only one in four correctly knew that rate rises lower prices.
The RBA surveyed 9,000 Australians and found more than half believe higher interest rates make inflation worse. The opposite is true.
Rate rises make mortgages, car loans, and credit more expensive, so households spend less. When demand for goods and services falls, businesses lose the ability to keep lifting prices.
Higher rates also push up the Australian dollar, making imports cheaper.
Why it mattersIf most Australians misunderstand how rate rises work, the RBA's inflation fight becomes harder as people expect prices to keep rising.
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