Borrowers can relax as rate rise unlikely
All 14 economists surveyed by www.goodreturns.co.nz expect Bollard to leave his official cash rate (OCR) unchanged at 3%. Bollard raised the OCR twice in June and July last year, the first upwards movements since mid-2007, but has held it steady since.
Late last year, the consensus was the next upward movement in the OCR would come about June but now many economists are pushing this back to September or later.
Brendan O'Donovan, chief economist at Westpac is one of them, largely because of the "shocker" outturn of September quarter GDP which fell 0.2%, against market and Reserve Bank forecasts of a 0.3% rise.
"The fact remains that the economy has not shown anywhere near the momentum that it should at this stage of a recovery," O'Donovan says.
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