Steve McKnight

And what they'll say is all of their forecasts at the moment are very dependent on what happens next.

So they even gave an example of even if we have higher petrol prices and higher inflation, if the economy is still really, really weak, we actually might not change the OCR at all.

We might leave it at 2.25%.

For that to happen, the economy would have to be weaker than they're currently expecting.

So it's just to say there is a scenario they released where they leave the OCR where it is and that the OCR is lower than what they're currently projecting.

They also gave us a scenario where they ratchet up the OCR faster if inflation runs further ahead of where they're anticipating.

In terms of the swap rates today, we actually didn't see much of an increase at all.

They went up by 0.06%, which just tells you that although the forecast changed from what we had before the war, of course they did, they were released before the war started, the market wasn't that surprised by what it saw today.

So that doesn't tell me that there's going to be immediate pressure for banks to massively increase their interest rates, though you may see some changes as well.

But I suppose from all of this, Andrew, what people really want to know is, well, how high might interest rates go?

Well, that's where we did get to, wasn't it?

We were at 4.5%.

With the expectation of the OCR going higher, we started to see the one-year rate go up to about 4.7%, depending on which bank you're looking at.

So it just tells you, it's not a perfect ballpark, but it's a good rule of thumb.

So what happens with the Reserve Bank's projection?

And that's pretty much what we've been using for our clients.

I think I had it going up to 5% next year.

I might increase it slightly, but then going up to 5.25% just because of the neutral OCR plus that margin in there.

One other thing I want to talk about, though, is what does this mean for your job?

So if we see petrol prices increasing, if interest rates increase, does that mean that unemployment's going to spike?