Two more interest rate hikes predicted by September

Monday 31 May 2004

The Reserve Bank will hike interest rates twice more by September to snuff out rising inflation, the New Zealand Institute of Economic Research (NZIER) said today.

By The Landlord

Previously, it had forecast just one more rate increase, but in its latest Quarterly Predictions, it says inflation is now forecast to rise to 2.5 per cent by the March 2005 quarter from 1.6 per cent at present.

A sharp fall in the dollar, higher world commodities prices, higher oil prices, manufacturing production at a 30-year high and modest stimulus from the budget spend-up, will all add to inflationary pressure.

"The more inflationary outlook will prompt the Reserve Bank into lifting interest rates over coming months," said senior economist Doug Steel. "We forecast the Official Cash Rate to lift to 6 per cent by the end of September."


Read More - Opens in a new window
Commenting is closed

Property News

Consents fall could have been worse

New dwellings consents dropped in April. That didn’t surprise anyone but economists were surprised that the drop wasn’t bigger.

House Prices

House price drops are short-lived - Alexander

Periods of house price decline are rare and "short-lived", says economist Tony Alexander, amid forecasts of a drop of 10%-15% this year.

Commercial

Resilience needed in face of change

The Reserve Bank says the commercial property sector is vulnerable to the Covid-19 crisis. But PMG Funds' chief executive believes that while there’ll be short-term pain, the biggest long-term impact will be structural change.

Site by PHP Developer