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Results: New Zealand Economy

Seedlings growing in soil
10 September 2021

Strong growth is a key factor driving higher interest rates

The bounceback in economic activity in New Zealand since the first nationwide lockdown last year has been so strong that the unemp...

"Expect delays" traffic sign
26 August 2021

Rate rises delayed but with upside risk

Borrowers could reasonably expect higher rates at their peaks, but not necessarily a faster speed of increase. Our central bank ha...

Piggy bank with coins on table
13 August 2021

Mortgage rates are going up

On Wednesday 18 August the Reserve Bank will review the record low 0.25% official cash rate set in place back in March 2020 when w...

02 August 2021

Monetary policy tightening soon

Things have changed a bit since my last column discussing interest rates a couple of weeks ago. The state of the pandemic has stalled the growth projections for many economies and how quickly interest rates will go up. But what's in store for New Zealand?

Person tightening bolt with spanner
16 July 2021

Three decades of falling interest rates are over

New Zealand has had a period of falling inflation and interest rates for over three decades. That period has now ended and both will be rising.

Toy houses on stacks of coins
02 July 2021

How the OCR could double monthly mortgage interest payments

If the official cash rate gets raised from 0.25% to 2.25%, we can anticipate that the one-year fixed rate to go from the current 2.19% to probably close to 4.5% when we allow for banks recovering some of their currently very low lending margins.

Calculator, laptop and cash on table
17 June 2021

Rising global inflation risks

History tells us that ahead of the 2008-09 Global Financial Crisis we economists under-predicted how high interest rates would need to go each cycle. But post-GFC we over-predicted rate rises. Now, we don’t know in what direction our errors will lie.

Young woman in supermarket