The big question is whether or not they are going to settle for a .25 per cent increase or go the whole hog and jump by .5 per cent.

Either way this is actually good news.

Nobody ever thought that the historically low three per cent cash rate would last.

If they had then they received a rude awakening last month when the RBA increased the rate by .25 per cent.

A .25 per cent today will only take the cash rate up to 3.5 per cent.

A .5 per cent increase will lift the rate to 3.75 per cent – still remarkably low by the standard of the last 20 years.

There are many home owners across the region who would still clearly remember the 17.5 per cent variable home loan interest rates of the early 1990s during what Paul Keating described as “the recession we had to have”.

Today’s interest rate rise is actually a clear indication that this is the recession we aren’t actually having.

That is a fact that was also clearly recognised by the Federal Government yesterday.

Unemployment forecasts have been slashed dramatically.

Joblessness is now expected to peak at 6.75 per cent – well down on the 8.5 per cent forecast in the budget.

And, more significantly, that peak is expected to occur in 2009/2010 – not 2010/2011.

We are, in short, in recovery mode.

The good news is that the federal government has indicated it is now winding back the stimulus package.

With the Reserve Bank and the Government now effectively on the same page future interest rate rises should be kept to a minimum.