If you think higher interest rates push prices up and worsen the cost of living, you’re in the majority. Of course, most of us understand how interest rates affect us on a purely personal level. More than half gave the wrong answer, saying higher interest rates would lead to higher inflation. But a quick note on why you shouldn’t feel too bad if you thought higher interest rates led to higher inflation. It’s also possible that many Australians link higher interest rates to higher inflation because the two can somewhat coincide.