Financial analysts are expressing surprise over a decision by the Reserve Bank today to lift interest rates by a quarter of a percentage point.
Following yesterday's board meeting at the Reserve Bank, the official cash rate is being set at 5-point-7-5 per cent.
The chief economist with the A-N-Z Bank, Saul Eslake, says the decision is likely to have implications for consumer spending rates.
"I have some concern that the combination of higher interest rates and higher petrol prices may cause a temporary slowdown in the Australian economy."
He says; "I thought the bank might have waited until petrol prices had subsided again. But, obviously, the bank was more concerned than they let on in their last public statement in February about the rise in core inflation and price pressures that have developed over the last three months."