Interest Rates Could Take Another Small Cut

Inflation Low - Interest Rates Could Take Another Small Cut

"The Q4 consumer price index increase of 0.6% has delivered a much welcomed low annual 1.8% inflation rate for the year, confirming that interest rates could have dropped sooner and lower than they were allowed by last year's OCR reductions", said Alasdair Thompson, Chief Executive of the Employers & Manufacturers Association (Northern).

"With global conditions remaining weak, we would not expect to see any lifting of the OCR by the Reserve Bank of NZ in the short term. To the contrary, a minor 0.25% cut in two weeks time would make sense. After that, a hold and wait pattern should follow at least until later this year", said Mr Thompson.

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