NZIER economist Kirdan Lees said waiting until March to lift rates would give governor Graeme Wheeler the chance to use a full suite of communication tools - including a monetary policy statement, press conference and select committee testimony - to tell the public why interest rates need to go up.
"But the economy is building up steam. Business confidence is soaring, consumers are ready to spend and the Canterbury rebuild will pressure inflation higher over 2014 and beyond. Loan-to-value restrictions also need help to slow the pace of house price rises in Auckland," he said.
Most market economists think Wheeler will wait but the shadow board is a survey of what he should do, not expectations of what he will do.
Bank of New Zealand head of research Stephen Toplis said: "There is no reason not to go now except for the fact that the Reserve Bank has said it won't and for consistency reasons can't."
ANZ chief economist Cameron Bagrie has called a rate hike this week while his counterpart at Westpac, Dominick Stephens, said it was probably better to wait until March when there is superior opportunity to communicate the decision.
NZIER principal economist Shamubeel Eaqub favours an immediate rate hike, saying "interest rates need to rise from very accommodative levels to avoid another episode of an overheated economy and overheated house prices".
The academic economists on the shadow board are divided.
Professor Viv Hall of Victoria University, a former member of the Reserve Bank board, favours an on-hold decision this week by a margin of 55 to 45 per cent.
But Professor Prasanna Gai of Auckland University sees rising risks to monetary and financial stability in current rates of capacity utilisation by firms together with a robust housing market and high debt levels.
"A moderate increase in the OCR would seem prudent both to complement [loan-to-value ratio restrictions] and to trim aggregate demand, particularly given the relatively benign international environment."
Among the business representatives on the shadow board, Business New Zealand chief executive Phil O'Reilly, who was all for no change last time, now sees it as a 50/50 call.
Scott Gardiner of MYOB said interest rates should remain the same through the March quarter to ensure businesses see surging confidence translate into results, while Steel & Tube chief executive Dave Taylor also favoured an on-hold decision.
