Australian households fear double whammy of rate hikes and higher petrol prices will lead to recession

Dougal Warby, who bought a Brisbane apartment in April 2025, has seen repayments fall and now rise again. Photograph: supplied

Surging interest rates and petrol prices have stripped more than $1bn a month from Australian household budgets as economists warn of recession risks.

Consumers are preparing for rates to surpass their recent highs after the Reserve Bank delivered back-to-back hikes ahead of an inflation spike driven by the US war on Iran.