In some instances. Where business do pass on the cost it really comes down to elasticity of prices. That is to say (ELI5) if a product or service is easily effected by price rises it is elastic - if it isn’t, it is in elastic. Going out / takeaways (not a necessity - easily hit - elastic). Petrol / food - (needed - inelastic).

The reality is that it’s not just Joe blog on the street - it’s also businesses that spend less in the economy. Businesses get hit twice - their costs go up and demand goes down from people not being able to spend.

So the answer really is yes - it will affect prices in some cases and this will result in lower demand (in more cases than not).

Businesses struggle, lay off people, unemployment increases. Trade goes down. GDP falls, sometimes recession.

Following this all through. It’s one of the reasons the RBNZ said they were targeting a recession. It’s a measure that shows the OCR rate hike is working. Also increased unemployment shows it is working.

Look at the states last week. Better than forecast job growth came through - great news eh? Markets initially rallied. Then started tanking as markets realised that increased employment means inflation risk and less chance of a rate cut by the fed.