Next OCR cut to be the last - ANZ

Cameron Bargrie

Until recently, ANZ was expecting two further 25 basis point cuts to the OCR – in November and then early in 2017.

But ANZ chief economist Cameron Bagrie said the bank has now removed the second OCR cut they had pencilled in to their forecasts for early 2017.

There are still reasons – like a global event, ongoing weak tradable inflation through NZD strength, or failure of inflation expectations to lift - for why the Reserve Bank could get dragged back to the easing table, he said.

“But when balanced against strong domestic growth, emerging capacity strains, rising domestic inflation pressures and some signs of a turn in the global inflation cycle, additional OCR cuts have become harder to justify as a central scenario.”