Bollard charts own course in interest rise

Not a lot in economics is certain, but an increase in the official cash rate ­ by 0.25% or, less likely, 0.5% ­ is pretty much a done deal.

More interest will be on how Dr Bollard and his economics team see interest rates over the coming year, and ­ sitting behind that ­ how they think the economy will perform over that time.

The management of monetary policy has undergone a change over recent years. Go back a decade: the country was approaching the top end of an economic boom.

Something similar is happening now --­ and the way the central bank is dealing with it is quite different from the 1994-95 period.

Back then though the interest rates were being jacked up much higher than they are now --­ they passed the 10% mark at least once.

The difference between then and now shows how much both the New Zealand economy has changed and also how the management of monetary policy has developed.

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