Economists’ tune changes to keeping the OCR on hold next week

Much has changed over the past six weeks and while three RBNZ Monetary Policy Committee members had voted for a rate hike in May, he thinks the “on hold” decision may well be reached by consensus.

While Eckhold called for an OCR increase at the RBNZ’s May meeting, he now says there seems much to be gained from waiting to see the outcome of the June quarter CPI.

“Certainly, the risks of prolonged second-round price impacts are lower than thought given the Iran conflict seems to have resolved much sooner than expected and energy prices have declined.”

Prospects for a normalisation of the OCR will remain a feature of the RBNZ’s communication at the meeting , Westpac says.