It is a very worrying situation, isn't it?Unfortunately, you're on the money that we're likely headed for higher interest rates, with many economists tipping another rate hike by the RBA in May.That's as inflation picks up, and as some economists forecast it could even go back close to or even above 5 per cent soon due to surging fuel prices.And unfortunately, we've just had AMP also tell us that the recession risk for Australia is rising, doubling to 30% of a chance of a downturn within the next 12 months.Read more here If diplomacy looks unviable, military intervention will be the chosen method to re-open the Strait."From there, the market reaction hinges on whether the operation is executed successfully or leads [to] an even more disruptive escalation."And on that note, catch you next week!Business reporter Emilia Terzon will be taking over the blog soon, and so to welcome her on, I thought we better share her TV package from last night.It looks at the businesses that are passing on skyrocketing petrol prices by imposing fuel surcharges on consumers.An interesting report suggests real wages have gone backwards in the past 25-years once you account for the cost of housing.The Institute of Public Affairs (IPA) examination of our consumer price index (CPI) and how we measure inflation raises some interesting questions.IPA Chief Economist Adam Creighton says our inflation statistics are "fundamentally flawed", and dramatically understate the true rise in the cost of living.House prices and mortgage repayments are the single largest financial cost most households face