This isn’t a drill. Your mortgage is officially on a knife-edge, and Compare the Market’s Economic Director David Koch just laid out the terrifying truth.

The Reserve Bank of Australia faces a monumental decision on Melbourne Cup Day, with a crucial inflation report on October 29 acting as the fuse.

Koch warns of a “nuclear option” – another rate hike – if inflation stays too high, creating a 50/50 chance that could either deliver relief or inflict serious financial pain.

“The September quarter CPI figure, due out on October 29, is the one to watch,” Mr Koch said.

“Unemployment is on the rise, which is a warning sign that the RBA may need to cut rates and get the economy moving again.

“But if underlying inflation (that’s the trimmed mean) comes in at 3 per cent or above, the Reserve

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