Margaret Lomas

So we're seeing power go up.

We're seeing petrol go up.

As we all know, the legendary lettuce has gone up.

So we have all of these other pressures or price pressures around us.

And the last thing people needed then was to also have that interest rate rise.

When they were approved for their loan, the bank estimated they could afford that interest rate rise.

But the banks weren't fact

in general inflation and the fact that the cost of living would go up.

In hindsight, I still feel that the only mistake that the Reserve Bank has really made is to almost promise that rates would stay low.

So they're being asked to resign on the back of what's probably considered to be a critical mistake by many people.

But in reality, whenever we have inflationary pressures, the only way that the Reserve Bank can deal with that is through monetary policy.

And that policy generally dictates that rates need to rise in order to curb spending.

We are anxious and eager to experience the good times and therefore we're spending more.

And when we spend more, that's when the inflationary pressures come in.

So what the Reserve Bank is trying to do is they're trying to stop us from spending and curb that discretionary spending on those new TVs and the new things that you get around your house that you don't necessarily need.

And the only tool they have to do that

is interest rate rises.

It's very difficult for people who are really on that borderline where they just qualified for a loan, housing prices ran away and they're paying so much for a house.

But I think we do have to understand as well that there's a flip side to every story.

And in this one, it is the danger of runaway inflation, which will be far worse than interest rate rises.