Carrington Clarke

But obviously, if you've got a situation where you have

rising unemployment and growth is stagnant at best.

Most people will feel that as a recession, won't they?

We did have a technical question yesterday about how the setting of the interest rate, the cash rate by the Reserve Bank actually impacts people's individual home loans.

What we saw yesterday, of course, was all the banks coming out almost immediately to say that they would be passing on the

a quarter of a percentage point in full to their borrowers.

It is a bit technical, but what's the easiest explanation for Cathy who wrote in this question?

So they're facing higher costs and that's why they're passing it on.

Yes.

Yeah, Michelle Bullock referenced the fact that actually there has been a lot of competition for home loans.

And so actually the difference between the cash rate and what people are paying for their home loans is actually smaller than it would otherwise be without that level of competition.

Macquarie has gone after home loans aggressively.

It's also gone after people's deposits as well by offering very high interest rates on people leaving their money with them.

Exactly.

So a lot of questions yesterday to Michelle Bullock about government policy.

I think a lot of journalists want the Reserve Bank to kind of be an umpire when it comes to government policy and obviously this debate around how much of the inflationary pressure in the economy is coming because of increased government spending.

Now, I thought once again, Michelle Bullock

handled this pretty deftly.

She obviously doesn't want to get drawn into a situation where she's directly criticising government policy.

But she pointed out that, yes, all things that add to demand, public demand or private demand, make it more difficult to bring inflation down.