By Gyles Beckford of RNZ
The Reserve Bank’s monetary policy statement on Wednesday has become a more close-run decision after a solid lift in Government spending in the Budget and surging numbers of immigrants change the economic landscape.
A week or so ago, analysts were mostly talking of a 25-basis point rise, taking the official cash rate (OCR) to 5.5 per cent, as inflation and the labour market, the RBNZ’s two core worries, showed clear signs of cooling.
The consensus was then that the RBNZ, after some tough talking, would take a breather and sit on the sidelines “watching, waiting, and worrying” about the numbers.
But ASB’s chief economist Nick Tuffley said the RBNZ’s challenges had increased.