The Reserve Bank of Australia will look through any temporary spike in inflation caused by higher oil prices, as economists warn that an escalation of the war between Israel and Iran could trigger a financial market meltdown.
Oil prices jumped 13 per cent over the past week to $US73 per barrel as markets braced for potential supply disruptions caused by conflict in the Middle East.
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Michael Read is the Financial Review's economics correspondent, reporting from the federal press gallery at Parliament House. He was previously an economist at the Reserve Bank of Australia and at UBS. Connect with Michael on Twitter. Email Michael at michael.read@afr.com
