The RBNZ has kept the official cash rate (OCR) at 2.50% since last April and most economists predict it will remain there until mid-2010.

Westpac Weekly Commentary says last quarter's 1.30% increase in the CPI was a huge upside suprise and if Q4 inflation suprises again on the upside tomorrow, the RBNZ will have cause to worry that inflation is not going to moderate to the required degree.

"This means monetary policy will have to be tightened more aggressively and perhaps earlier, than currently planned."

The RBNZ forecasted a fall of 0.20% and economists say it will be wary of another stronger than expected result.

Expert views reveal that Westpac is expecting zero inflation, BNZ is looking for a 0.10% rise, ANZ sees the CPI coming in at -0.10% and the Deutsche Bank thinks prices were likely flat for the quarter.

ASB Business Weekly says the recession has not triggered a period of muted inflation; it merely appeared to wipe out the excess inflation pressure from the economy.

"There is no longer much scope for the RBNZ to absorb upside suprises to the inflation outlook rather than to lift rates earlier than currently intended."

BNZ Markets Outlook agrees saying it struggles to believe the New Zealand economy has a fundamental inflation problem.

ANZ Market Focus says that while subdued, inflation has not been crushed as has typically been the case in previous recessions.

It says the market is looking for a trigger to force a rate hike in March but it does not believe CPI figures will do it.

Experts mostly agree that if there is another upside suprise in CPI data then the RBNZ will see the market test a March move.

However if inflation is as low or lower than the RBNZ's forecast of -0.20%, experts mostly believe that the RBNZ would feel comfortable with the mid-2010 timing for the hiking cycle to kick off, with expectations of a hike in April.

As for advice on fixed versus floating mortgage rates, ANZ Market Focus says it has seen little payside activity with only one bank increasing fixed mortgage rates last week in the one to three year space and assuming others follow, ANZ says there will be even less mortgage fixing activity.

It says rates will move higher this year but a steep yield curve looks set to stay for some time, negating some of the benefit of fixing.

ANZ's borrowing strategy continues to favour the use of caps as a way to hedge interest rate risk, while enjoying lower floating rates while they last.

Westpac also takes into account the growing prospect of OCR hikes in the first half of the year saying that the hikes will eventually flow through to short-term fixed rates, which have only seen small increases to date and remain at historically low levels.

As a result Westpac could see more borrowers moving to fix at the favourable rates still on offer.

"The experience of March/April last year shows that these types of flows can put a great deal of pressure on mortgage rates."

It says with floating and one-year fixed rates around similar levels there may not seem to be much advantage in fixing right now, but those who wait until they see the whites of the RBNZ's eyes are likely to face much less attractive options.

Westpac says repaying more than the minimum amount and spreading the loan over a mix of terms can help to reduce overall risk regarding uncertain future interest rate changes.