Economists expected that the central bank would increase the OCR by 25 basis points at last week's monetary policy statement.

Instead, the country was put into lockdown on the day of the policy review and the central bank abruptly halted its plans to tighten monetary policy.

Hawkesby is quoted as saying it was only the bad timing that stopped the rate hike.

ASB economist Mike Jones says, "For the first time, to our minds, Hawkesby also confirmed they may have hiked 50bps last week, absent lockdown." 

Hawkesby said monetary policy decisions "aren’t going to be tightly linked to Covid and whether we’re in lockdown or not".

Jones says although the RBNZ delayed the start of its tightening cycle last week, it has been quick to assert it will kick-off if/when the Covid-19 fog clears a little.

"Around three-quarters of mortgages are due to re-fix over the coming 12 months and the bank clearly doesn’t want the mortgage curve to droop."

"Uncertainty abounds but, for now, we’ve simply tabbed down our mortgage rate forecasts a touch, with the broad uptrend remaining intact. This is consistent with the RBNZ’s (so far) unwavering intention to lift the OCR back towards ‘neutral’ levels over the coming few years. Allowing for the usual lags, this turning in the mortgage rate cycle points to a clear change in house price momentum over the first half of 2022."