More OCR cuts on the cards later this year

ANZ is adding two more OCR cuts to its economic forecast after next month’s expected drop to  3.25%.

The retail trading bank has pencilled in cuts in August and October taking the OCR down to a low of 2.5%. It’s previous forecast was a 3% trough.

In the fourth quarter of next year it is has placeholder OCR hikes taking it back up to a neutral level of 3%.

ANZ chief economist Sharon Zollner says recent data – QSBOm Performance of Services Index,  electronic card transactions – on  balance suggest the economic recovery, while certainly well underway, is looking a bit more stop-start than the bank’s forecasts imply.