The interest rate rise is the wrong medicine and an even worse alibi | Yanis Varoufakis

Yanis Varoufakis argues that the Reserve Bank of Australia’s recent cash-rate increase is the “wrong medicine” for inflation. Writing around the RBA’s move on Tuesday—while more rate rises are expected—he says policymakers blame a cost jump from petrol prices and gas bills rather than wage demands. Varoufakis contends the inflation surge is instead driven by the Gulf war’s effects, including increased shipping costs, higher insurers’ premiums and diversions, which lift energy and input prices across economies. He distinguishes demand-pull inflation from cost-push inflation and says higher rates can’t lower global energy prices or bring down Hormuz-related costs. He also points to Australia’s LNG export structure, alleging foreign-owned firms benefit while households face the shock through prices and taxes.