Where to for rates

This theme has been strengthened since the Reserve Bank’s official cash rate announcement last week. As expected the bank’s governor left the OCR unchanged at 6.75% and the tone of it was slightly softer than in previous announcements.

This has led to speculation that the next change – whenever it comes – will be a cut in rates, thus lower home loan rates.

However a number of economists are warning people not to be presumptuous about a pending cut. The picture emerging is that a cut – when it comes is still many months away, and in the meantime don’t rule out the possibility of yet one more rise.

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