Bollard's views on inflation keenly sought; OCR on hold

None of the 13 economists surveyed by Goodreturns.co.nz expect Bollard to move his official cash rate (OCR) from its current record low at 2.5%, making the tone of his comments all important.

The central bank's own survey of expectations last month showed a sharp jump in two year ahead inflation expectations from 2.6% three months ago to 3%, even as businesses wound down their expectations of how fast the economy will grow.

Robin Clements, an economist at UBS New Zealand, says he wants to know how much of a worry Bollard finds the survey results "or is it not a worry yet? Are they fretting somewhat about the probable inflation pressures emerging from the Christchurch reconstruction?"

Construction materials prices, building industry wages and house prices are likely to rise and "housing being the normal problem-child for New Zealand," Clements says.