Surging global oil prices and bond yields could keep inflation higher than expected and force the Reserve Bank to raise the OCR faster than expected.
Some economists now expect the Official Cash Rate to reach 4% before the end of the year.
The Government says the Pre-election Economic and Fiscal Update —due out in two weeks— will try to reflect changes in borrowing costs.
Infometrics Principal Economist Brad Olsen told Andrew Dickens further conflict in the Middle East is pushing up oil prices, as fears grow about an AI bubble burst.
He says both of these things are happening, amidst mounting concerns about government debt.
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