Ian Verrender

I mean, given those assumptions, though, if you look at the numbers and look at their forecasts, it's not a pretty picture.

It's higher inflation, higher unemployment, lower growth.

I mean, it's just a question of how bad it gets, really.

I mean, and the worst case scenario, of course, you've got growth at 0.5%.

That's really not growth at all.

And you've got unemployment at 5%.

So that is a major shift in the dynamics of the economy at the moment.

You know, if you've got 0.5%, that would indicate that you're probably in recession.

Okay.

Well, essentially the Reserve Bank, there's a whole range of different interest rate mechanisms within the market.

And one of them is the level at which banks borrow between themselves overnight and from the Reserve Bank for cash to keep themselves afloat.

And that is the mechanism that the Reserve Bank uses.

So because they raise that rate, the banks then pass that through the rest of their borrowing and lending activities.

Bearing that in mind, though...

I mean, when you look at mortgages at the moment, I mean, there's a lot of competition out there in the mortgage market, primarily because, you know, we keep talking about the big four, you know, ANZ, NAB, Westpac and the Commonwealth.

But there's a fifth player in the market now and a very aggressive player, and that is Macquarie Bank.

And so they have been out there really, you know, cutting the grass from underneath the two major home lenders, which is Westpac and the Commonwealth.

And there's a lot of competition there.

So, you know,

Obviously, everyone's going to see higher interest rates, but there are deals to be done.