Interest rates tipped to rise again

Wednesday 8 September 2004

Interest rates are heading up tomorrow and probably again in October because the economy is booming and commodity export prices are high, economists say.

By The Landlord

But there is likely to a sharp slowdown next year, they said.

Most bank economists are picking Reserve Bank governor Alan Bollard to lift the official cash rate from 6 per cent to 6.25 per cent tomorrow, and what would be the sixth increase of the year, again in October.

The economy has grown much faster than expected this year, expanding 2.1 per cent in the March quarter, according to Bank of New Zealand economists. That compared with the Reserve Bank June forecast of just over 1 per cent.


That meant the economy was running at near full stretch, increasing the risks for inflation. Unemployment is running at just 4 per cent and retail spending is strong, both signs of a bustling economy.

Read More - Opens in a new window
Commenting is closed

Property News

Major industrial development powers on

It’s full steam ahead for the Stevenson Group’s $800 million, 361-hectare industrial and residential development in South Auckland – despite the uncertainties of the post-Covid-19 era.

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