Inflation dragon slain; RBNZ needs to start cutting

BNZ research head Stephen Toplis, writing in the bank’s latest Economy Watch, says, “In our humble opinion, the Quarterly Survey of Business Opinion (QSBO) screams cut rates sooner rather than later. 

Headlining the article ‘QSBO says inflation beaten’, Toplis says pricing intentions have slumped, the labour market is easing aggressively, growth is dead, and the market sees rate cuts soon, although the RBNZ may not.

In its last Monetary Policy Statement, the RBNZ predicted the OCR staying at 5.5% until August next year.

However, all the major banks are now pencilling in an OCR move down in November this year. The BNZ says the markets have priced in a 45% chance of an October cut and are absolutely convinced it will have happened by November.