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Supporting RBA rate hikes to curb tech-driven inflation

Published July 25, 2026 at 9:02 PM UTC

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Raising interest rates is the right move to prevent tech-driven inflation from spiraling out of control. The RBA's primary mandate is price stability, and allowing inflation to run too high would erode household purchasing power and savings. Tech costs are not a temporary blip: semiconductor shortages and cloud price hikes have persisted for over a year. Higher rates will cool excessive demand, particularly in the housing market, and encourage businesses to invest in efficiency rather than speculation. Savers, who have suffered from near-zero returns, will benefit. While higher rates may put pressure on some borrowers, the alternative of unchecked inflation is far worse. The RBA must act decisively to anchor inflation expectations and maintain credibility. A gradual tightening now is better than a sharp correction later.