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Old Mortgage News

Floating mortgage rates unlikely to rise for several months

Thursday 28th of October 2010

Bollard left his official cash rate (OCR) unchanged at 3% and his statement had little impact on wholesale interest rate pricing which indicates the next upward move in the OCR will be March next year at the earliest.

Bollard acknowledged recent weaker than expected data and muted housing market activity and consumer spending but says the medium term outlook remains broadly in line with the central bank's September forecasts.

"They've tried to play it with a straight bat. They've constructed the language to elicit no movement in market pricing," says Brendan O'Donovan, chief economist at Westpac.

"They're effectively discounting the recent data and telling the market you've priced it in, let's not take it any further."
Bollard did say "it remains likely that further removal of monetary policy support will be required at some stage."

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