OCR cuts by November prediction
In its latest economic report chief economist Jarrod Kerr says the bank is confident the inflation peak has been reached, with the annual rate now comfortably below 7%.
“We should see the final RBNZ rate hike next month. Although it’s not needed, the RBNZ will likely raise the cash rate by 0.25% to 5.5%, as telegraphed by the February Monetary Policy Statement.”
Kerr says Kiwibank is sticking to its call that any move beyond 5% will be a step too far. “We expect to see a material contraction in economic activity.”
He says the next move following next month’s decision will be rate cuts and the bank has pencilled in the first move to be made by November. It expects interest rate cuts by the end of the year.
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