Housing market unlikely to be able to withstand rate rises
Speaking in the wake of the RBNZ decision to keep interest rates on hold at 3%, Tuffley said that while the RBNZ was a little upbeat on signs the economy would pick up, "it wants to be certain the recovery is firmly underway before resuming the tightening cycle."
He said he expected rates to remain on hold until September and that despite unexpectedly lower GDP over the third quarter and retail spending weakness in the fourth quarter, RBNZ was mildly positive on the outlook.
Strength in trading partner growth, a recent pick up in business confidence and surge in imports of capital equipment were proving stronger forward indicators, Tuffley said.
He said the RBNZ remained comfortable with the inflation outlook and that the key message is, "the RBNZ will remain on the sidelines until it has sufficient confidence the recovery is entrenched."
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