NZ not likely to next cab off the interest rate hike rank

Last week the Reserve Bank of Australia hoisted its cash rate and speculation has been rife as to whether the RBNZ would be the next to move.

Economists think that is unlikely pointing to the growing economic divide between Australia and New Zealand as the reason behind this thinking.

ANZ/National Bank says NZ falls short in comparison to Australia on a range of indicators and sees potential for the opening up of a wide policy gap between the two. With the NZ dollar being "dragged" up by the Australian, it expects the Reserve Bank of NZ (RBNZ) will hold its position in the October Review by keeping interest rates low for an extended period. When NZ rates do rise, it predicts the Official Cash Rate (OCR) will peak at 5.5%.

The ASB Business Weekly also pours cold water on the idea that just because the Aussies have moved, the RBNZ will automatically follow.