TSB turn; OCR increase warning

Wednesday, July 17th 2013, 6:47AM 3 Comments

It's TSB's turn to increase rates. Late yesterday it increased its two, three, four and five year rates. They are up by five, 25, 20 and 30 basis points, respectively.

Also yesterday we had the latest CPI numbers which showed inflation remains subdued, with annual inflation sitting below of the Reserve Bank's target band at 0.7%. However there are concerns that the exchange rate is masking some of the inflation in the economy.  HSBC says that recent falls in the NZD coupled with a build-up in capacity pressures should see inflation begin to lift from here.

"As a result, the RBNZ may need to contemplate lifting policy rates from current stimulatory levels, a move which could occur as early as the end of this year."

« Rates just keep risingBNZ thinks floating rates about to rise »

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Comments from our readers

On 17 July 2013 at 9:33 am Matt said:
I'm working for a Bank and these rate increases are completely unnecessary.It's greed and the Banks are simply wanting to retain their large margins. Cost of Funds has not increased significantly enough to warrant this behaviour. Very disappointing.
On 17 July 2013 at 9:48 am You What? said:
Inflation at 0.7%? Petrol prices at record highs; A small head of Broccoli $3.50 compared to a large head of Broccoli at $1.79 only 2 years ago! Insurance premiums and Council rates sky-rocketing.
Jobs being cut everyday! Wages, pensions and benefits not increasing to compensate. I ask you, 0.7% inflation! I don't think so!!
On 18 July 2013 at 3:01 pm w k said:
@you what? They could be referring the 0.7% to the daily inflationary rate, or was it the hour inflationary rate?

Yeah, just not to long ago, I thought I was going to smell 91 octane petrol for under $1.80/lt (cheapest I bought was at Gull for $1.849/lt, but only had one chance), well, it's between $2.229 and $2.249 now. Now I smell price increases for other essential items round the corner.

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