<div class="block-content"><div class="styles__Container-sc-1ylecsg-0 goULFa"><span>Australians can expect to be squeezed by fuel-related inflation for at least six months, a top economist has warned.</span></div></div><div class="block-content"><div class="styles__Container-sc-1ylecsg-0 goULFa"><span>The US-Israeli attacks on </span><a href="https://www.9news.com.au/iran" rel="" target="_blank" title="Iran"><span>Iran</span></a><span> and Iran's subsequent closing of the Strait of Hormuz have seen unprecedented worldwide oil price shocks, with costs ultimately being passed on to consumers.</span></div></div><div class="block-content"><div class="styles__Container-sc-1ylecsg-0 goULFa"><span>AMP deputy chief economist Diana Mousina predicts Australians face at least half a year of soaring prices - and that could extend swiftly.</span></div></div><div><div id="adspot-mobile-medium"></div></div><div class="block-content"><div class="styles__Container-sc-1ylecsg-0 goULFa"><strong><span>READ MORE:</span></strong><span> </span><a href="https://www.9news.com.au/national/fuel-prices-australia-farmers-warn-low-supply-could-result-in-red-meat-shortage-high-prices/535293ff-f3c6-48e4-bc09-ad69399e6588" rel="" target="_blank" title=""><strong><span>Red meat shortage, price hikes coming if farmers can't secure more fuel</span></strong></a><strong><span></span></strong></div></div><div class="block-content"><div class="styles__Container-sc-1ylecsg-0 goULFa"><span>"Oil prices have doubled from their pre-war levels and sharemarkets have had a modest drawdown," she said in </span><a href="https://www.amp.com.au/resources/insights-hub/econosights-middle-east-inflation-and-gdp?utm_source=AJO&amp;utm_medium=Email&amp;utm_campaign=260402_Econosights_Investments_LiveSend&amp;correlationId=0402a720-8f42-44c4-a070-b483892db58c-0" rel="" target="_blank" title="an article for AMP's Econosights"><span>an article for AMP's Econosights</span></a><span>.</span></div></div><div class="block-content"><div class="styles__Container-sc-1ylecsg-0 goULFa"><span>"But, if there is no resolution to resuming oil supply, oil prices will surge further and have a significant downward hit to demand."</span></div></div><div class="block-content"><div class="styles__Container-sc-1ylecsg-0 goULFa"><span>Mousina also warned the risk of a further 5 to 10 per cent drawdown in markets remained "very high".</span></div></div><div><div class="OUTBRAIN" data-reactroot="" data-src="//www.9news.com.au/national/fuel-prices-likely-to-remain-high-at-least-six-months/6585ee16-a54a-421f-adca-f578382687c7" data-widget-id="AR_5"></div></div><div class="block-content"><div class="styles__Container-sc-1ylecsg-0 goULFa"><strong><span>LIVE UPDATES:</span></strong><span> </span><a href="https://www.9news.com.au/world/us-israel-iran-war-live-updates-april-2-donald-trump-latest-world-news-headlines/042b435f-0673-4c9e-b6a1-c6e0c193210b" rel="" target="_blank" title=""><strong><span>'Campaign of American strength': What Trump will say</span></strong></a><strong><span></span></strong></div></div><div class="block-content"><div class="styles__Container-sc-1ylecsg-0 goULFa"><span>"But our base case for now is that US and Iranian negotiations are successful over coming weeks," she said.</span></div></div><div class="block-content"><div class="styles__Container-sc-1ylecsg-0 goULFa"><span>"However, it may take a while for oil prices to normalise again. So higher inflation is likely for (up to six) months."</span></div></div><div class="block-content"><div class="styles__Container-sc-1ylecsg-0 goULFa"><span>Mousian estimated a household using 35L of petrol a week for driving would have been spending about $60 a week before March, rising to $88 a week in March, and would likely decline to $78 a week in April if there were no further oil price rises.</span></div></div><div class="block-content"><div class="styles__Container-sc-1ylecsg-0 goULFa"><strong><span>READ MORE:</span></strong><span> </span><a href="https://www.9news.com.au/world/artemis-ii-launch-nasa-astronauts-first-lunar-trip-in-half-a-century/07b8ff09-07b8-4f32-b7de-661e581f1966" rel="" target="_blank" title=""><strong><span>NASA launches four astronauts to the moon in first lunar voyage in 53 years</span></strong></a><strong><span></span></strong></div></div><div class="block-content"><div class="styles__Container-sc-1ylecsg-0 goULFa"><span>The lengthy oil shock is likely to have further knock-on effects, including slower consumer spending and lower GDP growth.</span></div></div><div class="block-content"><div class="styles__Container-sc-1ylecsg-0 goULFa"><span>Mousina also predicted the Reserve Bank of Australia would raise interest rates - a reflex learned from the COVID-19 pandemic.</span></div></div><div class="block-content"><div class="styles__Container-sc-1ylecsg-0 goULFa"><span>"While usually central banks look through supply shocks as one-off increases to prices, the problem is higher inflation expectations which can increase wage demands and higher prices seeping into other parts of the supply chain, much as it did through COVID-19," she wrote.</span></div></div><div class="block-content"><div class="styles__Container-sc-1ylecsg-0 goULFa"><span>"The 'PTSD' shock of COVID-19 will make central banks nervous to see the current supply shock as a 'transitory' factor and will keep central banks hawkish."</span></div></div><div class="block-content"><div class="styles__Container-sc-1ylecsg-0 goULFa"><span>Mousina predicted another increase to interest rates in May, and the "chance" of another in later 2026.</span></div></div><div class="block-content"><div class="styles__Container-sc-1ylecsg-0 goULFa"><span>"But this means that there is a high chance of rate cuts in 2027 as GDP growth slows," she said.</span></div></div><div class="block-content"><div class="styles__Container-sc-1ylecsg-0 goULFa"><strong><em><span>NEVER MISS A STORY:</span></em></strong><span> </span><strong><em><span>Get your breaking news and exclusive stories first by following us across all platforms.</span></em></strong></div></div><div class="block-content"><div class="styles__Container-sc-1ylecsg-0 goULFa"><ul><li><strong><em><span>Download the 9NEWS App here via</span></em></strong><span> </span><a href="https://apps.apple.com/au/app/9news/id1010533727" target="_blank"><strong><em><span>Apple</span></em></strong></a><span> </span><strong><em><span>and</span></em></strong><span> </span><a href="https://play.google.com/store/apps/details?id=nineNewsAlerts.nine.com&amp;hl=en_AU&amp;pli=1" target="_blank"><strong><em><span>Google Play</span></em></strong></a></li><li><strong><em><span>Make 9News your preferred source on Google by</span></em></strong><span> </span><a href="https://9.nine.com.au/8x987w" target="_blank"><strong><em><span>ticking this box here</span></em></strong></a></li><li><strong><em><span>Sign up to</span></em></strong><span> </span><a href="https://login.nine.com.au/edm?client_id=nineatnine" target="_blank"><strong><em><span>our breaking newsletter here</span></em></strong></a></li></ul></div></div>