Rate hike on, but not a done deal
The mortgagerates.co.nz survey of economists shows that all but two of them expect the OCR to increase by 25 basis points. The consensus is that although dairy prices and the latest inflation numbers were relatively benign, an increase is likely.
One change though is that very few economists are 100% sure of their predictions. Some like Westpac's Dominick Stephens (pictured) give it a 70% probability and say it's not a "done deal".
Deutsche Bank economist Darren Gibbs says that, on the back of recent data, the need for a hike next week is less certain in than for earlier OCR announcements. However, he says the RBNZ will: "Conclude that one further 25 basis point hike, at this stage, is unlikely to constitute a gross policy mistake."
The theme coming through from economists is that Reserve Bank governor Graeme Wheeler will want to reinforce the message about the need to tighten monetary policy and get the cash rate back to neutral, while at the same time pausing.
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