Rate rise not expected this week: Economists

But that stronger data does increase the possibility of a further rate hike later this year and decreases the likelihood of any rate cut.

A Reuters poll of 14 economists found they think there’s a 73% chance of Bollard leaving rates unchanged, although there’s a 25% chance of a 25 basis point rise from the current 6.5% OCR.

They rated the chances of a rate cut at only 1%. Among the data, the December quarter inflation rate was 20 basis points higher than the central bank had expected and pushed the annual rate to 2.7%, just below the bank’s 3% upper limit.

A business survey showed a high level of capacity utilisation, the New Zealand dollar is weaker than the Reserve Bank expected and retail sales in November were 7.7% up on the previous November.

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