BNZ pushes back OCR increase prediction
BNZ economist Tony Alexander says in the Weekly Overview that lending for housing has fallen for the fist time on record and the unemployment rate rose to 6.8% in the December quarter, not holding at 6.4% as forecast by the Reserve Bank in early December.
"What we have is a combination of easing demand and rising slack in the economy - these developments argue strongly against an interest rate rise in the next few months.
"We now do not expect the next rate rise to come until September," says Alexander.
Further supporting the argument for the next monetary policy tightening being a long way away is the increasing power of monetary policy changes coming about as people roll off fixed rates into floating rates, he says.
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