New research has found that nearly half of all New Zealanders are in a tight financial spot - and the Reserve Bank’s OCR call yesterday won’t do anything to ease their pain.
Mortgage rates are just part of the equation. Rents began to creep
up again in December - and food, fuel, power and insurance costs remain high.
It’s a tricky economic spot for the new coalition Government to find itself in - something Prime Minister Christopher Luxon has been at pains to point out. It’ll require “tough love”, Luxon says - presumably delivered by Finance Minister Nicola Willis in her first Budget in May.
The Herald’s business editor-at-large, Liam Dann, says the pessimistic rhetoric makes political sense, but it’s important to keep an eye on the big picture.
“Recession has arrived on schedule but the economy is not collapsing,” Dann wrote in a column on Sunday. “This is all going to script. Unemployment is likely to tick up above 5 per cent. We’ll see more business failures and mortgagee sales, but inflation will fade and rates will fall.
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