Interest rate relief remains way off

Although the Reserve Bank is presently having success slowing housing activity – higher mortgage rates are flowing through into the housing market and have started to bite, the housing market has slowed, and borrowing growth is moderating – the slowdown needs to broaden beyond the housing market before it can relax.

Despite the housing market moving in the right direction for the Reserve Bank, inflation risks are rising, says ANZ, due to government stimulus and booming commodity prices such as in the dairy sector.