While interest rate increases, long recognised by economists as the best way to counter rising inflation, are necessary given RBA projections inflation will top seven per cent by the end of the year, the reality is consumer demand is already being suppressed by the increase in the price of petrol. This is sucking hundreds of dollars a week out of many household budgets. This drain on family finances will only get worse when the fuel excise rebate jumps 22 cents a litre come September.

This latest rate increase to 1.35 per cent, which comes after a 0.5 percentage point increase in June and a 0.25 increase in May, will do nothing to bring the price of petrol down at the pump, fix supply chain problems or labour shortages, or reduce the prices of fresh produce which are expected to increase even further as a result of the latest floods.

That raises questions about just how effective this latest round of rate rises, a proverbially blunt instrument at the best of times, will be in reining in inflation.

While, as the RBA has repeatedly assured us, rates are only expected to return to where they were before the pandemic, its assumption most households are sitting on a large pile of savings and can afford to pay a bit more on their home loans deserves closer examination.

It is estimated the combined rate rises to date will increase repayments on a $500,000 mortgage by about $300 per month. If the RBA follows the trajectory predicted by some economists this could reach $500 or $600 per month by the end of the year. That will be a bitter pill to swallow for many.

First home buyers who have taken advantage of the historically low interest rates of the last two years to enter the property market will have thrown everything they had at the deposit along with, in many cases, a heavy overdraft on the bank of mum and dad.

Not only do they lack any substantial reserves, they are also looking at the prospect of negative equity in their homes as a result of falling home prices in Sydney, Melbourne, Newcastle, Wollongong, the other capitals, and the many regional centres which enjoyed a price boom during the pandemic.

Home owners of course are not the only ones who are being impacted. Landlords are already passing the previous rate rises on to tenants and this latest rise will send rents rising even further.

The millions of Australians who are going to be directly affected by the end of the era of cheap money are entitled to ask why the RBA waited so long to begin increasing rates. If, like New Zealand, the RBA board had started hiking rates when red flags were starting to appear last October, would it have had to go so fast and so hard now?

While the Treasurer, Jim Chalmers, was quick to blame the decline in Australia's economic fortunes on "a lost decade" under the Coalition on Tuesday, he can't escape the fact his government is facing an enormous challenge.

Having been so critical of the Morrison government for ending JobKeeper and increased JobSeeker payments, his reluctance to announce support for people already in crisis, and his refusal to consider extending the fuel excise cut, warrants explanation.

There may, or may not be, some form of cost-of-living relief in the August budget but that is a month away. Many Australians are wondering if they can wait that long, or even if they will still have a home by then.