BNZ Weekly Overview economist Tony Alexander and JP Morgan Weekly Prospects economist Helen Kevans are both now forecasting that the Reserve Bank will now not raise the OCR again till December.

Alexander says this means steady floating rates until then and little reason for jumping into a fixed rate unless one expects the fixed rates to suddenly rise.

Kevans acknowledges that the next rate move may even be delayed until next year should the global picture deteriorate further and the domestic data suggest that the recovery underway has come to a standstill.

ANZ, ASB and the markets also now expect a pause in September.

ANZ Market Focus believes there is simply too much uncertainty at the moment for the Reserve Bank to tinker with policy.

It believes the recovery has been delayed, rather than undermined and it still sees the OCR moving higher into late 2010/early 2011.

ANZ says borrowers must now choose between slightly higher floating rates and fixed rates that while low by historical standards, may head lower yet.

"The threat of quantitive easing in the US is like an elephant in the room for local interest rates and things may intensify yet.

"It would therefore be foolish not to acknowledge that interest rates may continue to move lower."

BNZ Markets Outlook says the market is now pricing just a 25% chance of a September hike, with only around 45 basis points of total hikes now priced through to June next year.

ASB Business Weekly says central banks have to steer between the risk of tightening too soon and stopping the recovery before it gets going or tightening too late and having to play catch up to rampant inflation.

 It believes of these two extremes the Reserve Bank looks more likely to hit the first.

"We put a 60% chance on the Reserve Bank pausing in September and taking a few months off to have a cup of tea."

Westpac Weekly Commentary however, has gone against the grain saying in its view on a fine balance, a hike in September would be more consistent with the Reserve Bank's recent comments than would a pause.

"The Reserve Bank still appears to have every intention of returning the cash rate to neutral levels somewhere in the order of 5% - 6% over the medium term."