tmmonline.nz  |   landlords.co.nz        About Good Returns  |  Advertise  |  Contact Us  |  Terms & Conditions  |  RSS Feeds

NZ's Financial Adviser News Centre

GR Logo
Last Article Uploaded: Tuesday, August 3rd, 6:58PM

Mortgages

Mortgage Rates Daily Commentary
Friday 30 July 2021  Add your comment
FSCL case highlights clawback danger

A case study posted by FSCL has highlighted the potential risks with clawback clauses. A mortgage adviser has been forced to drop their request for a commission clawback following a dispute: [READ ON]

rss
Latest Headlines

Inflation expectations fall sharply

Marked decline in inflation expectations could be crucial for OCR outlook, one major bank says.

Wednesday, February 17th 2016, 10:53AM

by Miriam Bell

The Reserve Bank has released its quarterly survey of expectations and it shows a significant fall in expected inflation.

Respondents now expect inflation will be at 1.63% in two years’ time, as compared to the 1.85% recorded in the last survey.

Westpac chief economist Dominick Stephens said it is the lowest ever level of inflation expectations relative to the inflation target.

“We have been expecting inflation expectations to fall for some time, but the size of today's drop took us by surprise.”

Inflation has been below the 2% mid-point of the RBNZ's inflation target band for some time.

Stephens said the RBNZ has argued that the drop in inflation is temporary, and that monetary policy is on track to achieve 2% inflation in the future.

But crucial to their argument was that, even when inflation was low, inflation expectations remained close to 2%, he said.

“Falling inflation expectations across market- and survey-based measures is now calling that argument into question.

“Low inflation expectations may start to impact wage claims and price setting behaviour, in turn leading to even greater downward pressure on inflation.

Westpac is forecasting that inflation will fall to -0.1% by September 2016 – which could lead inflation expectations to fall further.

Stephens said the data is a very important development for the OCR outlook

“It further substantiates our long-held call that the OCR will fall below 2.5% this year.”

While he expects an OCR cut in June, he said the data means the RBNZ could move sooner and cut in March.

However, in a published comment, ANZ took a different view.

The bank said they were coy about reading too much into recent shifts in inflation expectations, particularly given the broader picture.

The RBNZ is going to have continued problems hitting its inflation target, as will central banks around the world, and inflation expectations will be prone to drifting in such an environment, ANZ said.

“Cutting the OCR in the face of greater leveraging behaviour, solid consumption growth, and double digit house price growth is the recipe for an accident.”

ANZ said the RBNZ’s emphasis on flexibility, as opposed to a mechanistic approach, when fighting inflation was appropriate.

For this reason, the bank doesn’t expect the RBNZ to be too concerned over the dip in inflation expectations.

Tags: ANZ banks interest rates OCR RBNZ Westpac

« Dropping rates should boost slow growthHSBC offers lowest home loan rate in over 50 years »

Special Offers

Comments from our readers

No comments yet

Sign In to add your comment

 

print

Printable version  

print

Email to a friend
Mortgage Rates Table

Full Rates Table | Compare Rates

Lender Flt 1yr 2yr 3yr
AIA 4.55 2.55 2.95 3.29
ANZ 4.44 3.10 3.50 3.84
ANZ Blueprint to Build 1.68 - - -
ANZ Special - 2.50 2.90 3.24
ASB Back My Build 1.79 - - -
ASB Bank 4.45 2.55 2.95 3.29
Basecorp Finance 5.49 - - -
Bluestone 3.49 3.34 2.99 3.34
BNZ - Classic - 2.55 2.95 3.25
BNZ - Mortgage One 5.15 - - -
BNZ - Rapid Repay 4.60 - - -
Lender Flt 1yr 2yr 3yr
BNZ - Std, FlyBuys 4.55 3.15 3.22 3.85
BNZ - TotalMoney 4.55 - - -
CFML Loans 4.95 - - -
China Construction Bank 4.49 4.70 4.80 4.95
China Construction Bank Special - 2.65 2.65 2.80
Credit Union Auckland 5.95 - - -
Credit Union Baywide 5.65 3.95 3.85 -
Credit Union South 5.65 3.95 3.85 -
First Credit Union Special 5.85 2.95 3.45 -
Heartland Bank - Online 1.95 1.85 2.35 2.45
Heretaunga Building Society 4.99 3.80 3.90 -
Lender Flt 1yr 2yr 3yr
HSBC Premier 4.49 2.19 2.45 2.69
HSBC Premier LVR > 80% - - - -
HSBC Special - 2.25 - -
ICBC 3.69 ▲2.29 ▲2.69 ▲2.99
Kainga Ora 4.43 2.67 2.97 3.13
Kainga Ora - First Home Buyer Special - 2.25 - -
Kiwibank 3.75 3.34 3.34 4.14
Kiwibank - Offset 3.75 - - -
Kiwibank Special 3.75 2.49 2.49 3.29
Liberty 5.69 - - -
Nelson Building Society 4.95 2.99 3.24 -
Lender Flt 1yr 2yr 3yr
Pepper Essential 4.79 - - -
Resimac 3.39 2.98 2.79 3.29
SBS Bank 4.54 ▲2.89 ▲3.29 ▲3.49
SBS Bank Special - ▲2.39 ▲2.79 ▲2.99
Select Home Loans 3.49 3.34 2.99 3.34
The Co-operative Bank - First Home Special - 2.29 - -
The Co-operative Bank - Owner Occ 4.40 2.49 2.89 3.19
The Co-operative Bank - Standard 4.40 2.99 3.39 3.69
TSB Bank 5.34 3.30 3.69 4.04
TSB Special 4.54 2.50 2.89 3.24
Wairarapa Building Society 4.99 3.55 3.49 -
Lender Flt 1yr 2yr 3yr
Westpac 4.59 3.15 3.49 3.89
Westpac - Offset 4.59 - - -
Westpac Special - 2.55 2.89 3.29
Median 4.54 2.78 2.99 3.29

Last updated: 2 August 2021 9:09am

Previous News

MORE NEWS»

News Bites
Compare Mortgage Rates
Compare
From
To
For

To graph multiple lenders, hold down Ctrl key while clicking in list box

Also compare rates to OCR
Find a Mortgage Broker

Add your company

Use map
About Us  |  Advertise  |  Contact Us  |  Terms & Conditions  |  Privacy Policy  |  RSS Feeds  |  Letters  |  Archive  |  Toolbox  |  Disclaimer
 
Site by Web Developer and eyelovedesign.com