Despite a raft of stronger-than-expected data last week, economists still don’t expect Reserve Bank governor Alan Bollard will raise interest rates when he reviews the official cash rate (OCR) on Thursday.
Thursday, January 27th 2005, 8:39PM
by The Landlord
But that stronger data does increase the possibility of a further rate hike later this year and decreases the likelihood of any rate cut.
A Reuters poll of 14 economists found they think there’s a 73% chance of Bollard leaving rates unchanged, although there’s a 25% chance of a 25 basis point rise from the current 6.5% OCR.
They rated the chances of a rate cut at only 1%. Among the data, the December quarter inflation rate was 20 basis points higher than the central bank had expected and pushed the annual rate to 2.7%, just below the bank’s 3% upper limit.
A business survey showed a high level of capacity utilisation, the New Zealand dollar is weaker than the Reserve Bank expected and retail sales in November were 7.7% up on the previous November.
