KEY POINTS:
The significance of governor Alan Bollard's statement this morning is that he has dropped the word "significant".
Six weeks ago he told us the official cash rate would have to remain at the current level of 8.25 per cent for " a significant time yet."
Now he is saying it will have to stay there for "a time yet."
It is a signal that he will take his foot off the brake earlier than the middle of next year implicit in the bank's March statement.
He acknowledges that the economy is weakening more rapidly than the bank expected last month, but goes on to list the factors that will limit the slowdown - a strong labour market, still high export commodity prices and the "possibility" of tax cuts.
While the weaker economy will "over time" lessen upward pressure on prices the bank still sees upside risks to inflation, especially from a wage-price spiral if pay settlements respond to repeated rises in food and energy costs rather than to weakening economic activity.
