Economists agree OCR cut coming

Of the 11 economists surveyed by Good Returns, eight are expecting Bollard to cut the OCR from 3% to 2.5% while two of the others are expecting him to cut to 2.75% and one is unsure whether it will be 25 basis points or 50. Bollard has cut the OCR from 8.5% since July last year with the last cut of 50 basis points on March 12.

"It’s fair to say it’s a debate between 25 (basis points) and 50. We’re not strongly of the view it will be 50," says Craig Ebert, an economist at Bank of New Zealand, which nevertheless is picking 50 points.

"Clearly they’ve (the Reserve Bank) indicated a preference for slowing down the rate of cuts. We certainly think the economic backdrop justifies at least a 25 point cut," Ebert says.

However much Bollard cuts, he should make it clear he isn’t closing the door on further cuts as well as emphasising he isn’t likely to start raising rates again any time soon, he says.