Cash rate unchanged at 7.25 per cent

The Official Cash Rate (OCR) will remain on hold at 7.25 per cent.

Reserve Bank Governor Alan Bollard this morning confirmed that recent data has confirmed his earlier view that economic growth is slowing.

"Business activity and confidence have been softening for some time. On the other hand, household spending has only recently started to wane. A key driver of strong household spending has been the buoyant housing market which, while showing signs of cooling, still remains very active.

"Over the next two years, we expect overall growth to remain subdued while a major rebalancing takes place, with a recovery in net exports as domestic demand weakens. A decline in the New Zealand dollar exchange rate is expected to play a role in this rebalancing", he said.

Dr Bollard effectively ruled out the possibility of rate cuts in the near future.