Fuel shock and rate hike raises the pressures on businesses and households

CPA Australia warns today’s interest rate rise will deepen the cost-of-living crisis and make it tougher for many small businesses – particularly those heavily reliant on fuel.

With fuel prices surging, inflation remaining stubborn across essential goods and services, and consumer confidence weak, households and businesses face a perfect storm of rising costs and weakened resilience.

Gavan Ord, Business and Investment Lead at CPA Australia, said fuel reliant businesses are already feeling the pain, with transport, trades, logistics, agriculture and regional operators among the hardest hit.

“These businesses are feeling bruised by higher fuel costs that are flowing through every part of their operations,” Mr Ord said. “Fuel isn’t optional – it’s fundamental – and when prices spike, costs rise immediately with very little room to hide.

“For many small businesses, fuel is now one of their largest and most volatile expenses. Combined with higher interest rates and persistent inflation, it’s making an already difficult situation worse.”

Mr Ord said the latest rate rise hits at a time when confidence across the economy is already low.

“Households are pulling back, businesses are losing confidence, and yet costs keep rising,” he said. “This rate increase adds fresh pressure just as many were hoping for some relief.”

“Borrowers who might have believed last month’s rate rise was a one off will be deeply disappointed – at the same time as fuel, food and energy bills continue to climb,” Mr Ord said.

For small businesses dependent on transport and mobility, the impact is being felt daily.

“Every trip, delivery and service call now costs more,” Mr Ord said. “Businesses can’t absorb these increases indefinitely, and many are running out of options.”

CPA Australia warned that consumers should brace for flow on effects.

“When costs rise this sharply and this quickly, prices at the checkout inevitably follow,” Mr Ord said. “Many small businesses will be forced to pass on higher costs, while others will delay investment, reduce services or scale back employment.”

CPA Australia said the economic pressure highlights the urgent need for long-term reform to improve business sustainability.

“Short-term relief won’t fix a system where small businesses are burdened by high costs, excessive red tape and uncertainty,” Mr Ord said. “What is needed is decisive action to cut unnecessary regulation, lift productivity and restore confidence.”

Mr Ord urged businesses and households under strain not to wait before seeking advice.

“In conditions like this, early decisions can make a positive difference,” he said. “Accountants help businesses manage cash flow, plan for volatility and navigate heightened financial risk.”