When will the first OCR increase occur?

The Reserve Bank is predicting as a result of the economy’s pace of growth going from -0.5% in the year to September 2025 to 2.8% in the year to March 2027 then 3.1% the year after, the inflation rate will fall from 3% to 2.2% then 2%.

That is what the markets have priced in, Alexander says.

However, the new Reserve Bank Governor Dr Anna Bremen has tried to push back against that expectation – with understandably minimal success in terms of levels of wholesale interest rates.

“Her actions are significant. They tell us that the theory of the central bank continuing its past policy tendency is probably valid.