Flurry of rates

Most of the movement has been from the banks which first dropped their short-term fixed rates and left longer-term ones unchanged. Then they reversed the trend putting rate terms of three years or more down and shorter-term rates up.

The changes were brought about firstly through weaker economic data, but following the Budget a view developed that the government's spending plans were going to increase inflation, thus lengthening the time until home loan cuts came through.

While this situation has caused some confusion for borrowers, the most important piece of news to guide people was Thursday's official cash rate announcement from the Reserve Bank.

RBNZ governor Alan Bollard painted an economic picture, which if correct, means that rates are headed southwards.