OCR unchanged, mid-year hike reiterated
"The relatively sluggish recovery predicted in recent statements continues to play out," Bollard said in Wellington today.
"Households are still cautious, with house sales and credit growth remaining subdued. Business spending is weak despite much improved confidence."
All 17 economists in a Reuters survey correctly predicted Bollard would stand pat on interest rates today. Before today they were forecasting a 25 basis point hike in the OCR by June 30 and 1.25 percentage points of increases to 3.75% by the end of the year.
The recovery from last year's recession has been more muted than many analysts had expected, with the jobless rate reaching a 17-year high, while building consents have tapered off and consumers pared spending on debit and credit cards, suggesting they're still fretting about job security and the value of their homes. Consumer prices fell 0.2% in the fourth quarter.
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