ANZ predicts 1% OCR in 2020

ANZ's Sharon Zollner (pictured) expects a 25 basis point cut in November 2019, with a further 50 basis point drop over the course of 2020. Such a cut would see the OCR plunge below today's historical low of 1.75%, leading to an unprecedented period of low interest rates.

ANZ previously predicted the OCR would be flat for the "foreseeable future". However, concerns around global growth and liquidity, and weak inflation, have made the economist change her mind.

Zollner believes the RBNZ will conclude economic growth is not strong enough to put inflation at its target midpoint. She said: "We have not changed our view that GDP growth will muddle along in the 21⁄2-3% range over coming years."

It come as figures today revealed New Zealand GDP growth fell to 0.3% in September, short of expectations. Zollner added: "It is certainly not a case of us expecting that the economy is about to roll over, and it is ironic that we are changing our call just as business sentiment indicators are improving. But economic momentum is nonetheless a little softer."