The Reserve Bank of Australia warns that the Middle East conflict could trigger higher interest rates and oil price spikes in Australia. Petrol prices are expected to rise, with each $1 increase in world oil prices adding about one cent per litre at the bowser, while airfares and transport costs may also increase due to higher fuel costs. The strong Australian dollar, currently above 70 cents, may provide some buffer against these price increases, though economists warn inflation could still push above 4 per cent.

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