ASB warns of high inflation, falling house prices

On interest rates, it comes close to but does not match the ANZ's forecast of a 3% peak OCR, saying only that it could reach 2.25% by the end of the year and rise further next year by an unspecified amount.

The ASB says Covid will hang heavily on the country during the year, with an outbreak of Omicron looking to be a matter of ‘when’ and not ‘if’.

This could increase employee absenteeism and aggravate existing labour shortages.

A further problem will be soaring inflation in New Zealand and abroad, which has been worsened by global supply chain disruptions.