I mean, how large is the risk of a recession now for next year?

That is a very interesting question.

If you went back to, let's say, March when you had the Middle East start to kick off again, we had the R word brought up at that point in time.

We didn't think there was a base case back then, a bit of weakness in growth, but we managed to sail through the first part of the year reasonably well despite those fears.

Here we are now with, as you say, a much weaker housing market in particular and a resurgence in the least fears.

Still don't think that the R word is on the cards for Australia here.

In per capita terms, yes, you can have a recession with this backdrop.

Are we seeing some sort of fundamental change here with bond yields? What's causing it?

Okay, Rob, so, so what kind of policy response have we seen from the Australian government to date?

Well, Peter, it took them a month or so, but eventually the federal government, earlier this week, took the most obvious course of action available, which was to cut taxes on fuel.

They've halved what we call a fuel excise tax, and they've also cut the road user charge for heavy vehicles to zero.

Both have been announced for three months.

The end result is that everyday consumers are facing about a forty percent increase in petrol prices instead of a sixty percent odd increase.

So it's still a huge shock.

Uh, and some forms of fuel, like diesel, have gone up a lot more than petrol too, and have a lot more sensitivity for businesses and for those, especially in the regions.

Um, could they now be forced to take the cash rate even beyond the prior peak of four point three five?

Does this mean labour market considerations take a backseat and the RBA may need to look at hiking rates next year?

Hi, Jason.

The pickup in the last couple of quarterly inflation reports and monthly has indeed overshadowed labour market considerations recently.

For extra context, there's largely because the labour market picture doesn't look all that bad.

If employment was truly struggling, we might not be discussing openly rate hikes at all.

But stepping back into the data a little to set the scene first, the unemployment rate's been gradually creeping up towards 4.25, 4.5, from a base of 3.5% in late 2022.

But the most recent October reading, it dipped again from 4.5 to 4.3. And we're not expecting to reach much above 4.5 next year either.

At what point are they wide enough to warrant another look from global investors?