What do Higher Oil Prices Mean for Inflation? May 2026 Economic Update

Our latest ‘What’s Going on in the Economy’ video for students and teachers explains why inflation has increased recently, and how higher oil prices affect inflation. It also links directly to key concepts such as cost-push inflation, demand-pull inflation, and inflation expectations.

We’ve also released a new, ready to use worksheet for the classroom to help students engage with and apply these ideas. Link: https://www.rba.gov.au/education/teacher-materials/learning-activities/

A practical, curriculum aligned resource to connect theory with real world developments.

Key topics covered:
0:23: Why has inflation increased recently?
2:22: How do higher oil prices affect inflation?
6:07: The labour market
6:33: Where is the economy heading?
7:26: Cash rate decision

Explore more resources for teachers and students on our website: https://www.rba.gov.au/education/

Read the full Statement on Monetary Policy (May 2026) – https://www.rba.gov.au/publications/smp/2026/may/
Read the Monetary Policy Decision (May 2026) – https://www.rba.gov.au/media-releases/2026/mr-26-12.html