by Susan Edmunds
All of the 13 economists polled by www.mortgagerates.co.nz said the rate would stay at 2.5% on Thursday. And they agreed the next move in the OCR would be by 25 basis points, to 2.75%.
Robin Clements, of UBS New Zealand, is expecting an increase the soonest of any of the 13 economists polled. He expects the OCR to be raised to 2.75% in June.
He said the economy was picking up speed. “It’s not about slowing the economy down or pushing down on inflation, it’s taking the foot off the accelerator.”
Preventative measures were needed, he said. It was unlikely the bank would have any of its macroprudential tools ready very soon.
Tom Kennedy, of JP Morgan, follows – predicting an increase in the third quarter of this year.
Gareth Kiernan, of Infometrics, Michael Gordon, of Westpac, and Doug Steel of BNZ, expect the move to happen in December and Paul Bloxham of HSBC predicts it will happen in the final quarter of this year.
Steel said by December the economy would be sufficiently strong to be putting pressure on medium-term inflation.
Unemployment would be dropping, he said, and the heat in the housing market, combined with the Canterbury rebuild, would also be pushing inflation up. “The world is looking less scary than it was six months ago.”
He said a 25 basis point increase in the OCR would likely not be enough to take the housing market off the boil. “If the world is even further out the mire, and interest rates are still low, an adjustment by 25 points is not going to make much difference.”
But he said if the Reserve Bank signalled further rises to come, it might make some people take notice.
Gordon said Westpac had previously picked September for the first OCR move but its view changed over the past fortnight because of soft inflation figures and a strong dollar.
He said Westpac was expecting a slightly more dovish statement from Reserve Bank Governor Graeme Wheeler this time than last.
But he said the Christchurch rebuild was ramping up, business and consumer confidence had improved and retail spending had picked up. That would eventually force Wheeler to act.
The rest of the economists predict the move will happen in March 2014.
Chris Green, of FNZC, said there was a 1% chance that the OCR could be cut on January 31. But Gordon said the Reserve Bank would want to stay away from any suggestion of rate cuts, for fear of stoking the property market.
| « ASB pushes out date for OCR increase | Tripe: Banks exposed » |
Special Offers
No comments yet
Sign In to add your comment
© Copyright 1997-2024 Tarawera Publishing Ltd. All Rights Reserved