Bill English MP
National Party Finance Spokesman

6 December 2007

RBNZ signals higher interest rates for longer

National Party Finance spokesman Bill English says the Reserve Bank Governor has signalled that Kiwi borrowers face higher interest rates for longer.

He is commenting after Governor Alan Bollard decided today to leave the Official Cash Rate unchanged at 8.25%. However, Dr Bollard also said ‘inflationary pressures have increased, and interest rates are now likely to remain around current levels for longer than previously thought’.

“Borrowers can't expect any relief from high interest rates until 2010. Most homeowners will find they are paying more than 9% until 2010, and all new homeowners will pay more than 9% on their mortgage.

“After eight years of Michael Cullen’s economic stewardship, New Zealanders are paying among the highest interest rates in the developed world and paying taxes which are also in the top half of the OECD.

"This extended period of high interest rates is partly the result of Labour’s large-scale low-quality spending, and more regulation in the economy.”

ENDS

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