Inflation is expected to spike higher than many were predicting, as a result of yesterday's Budget tax changes.

As an external debtor country, NZ could be vulnerable to any renewed deterioration in global debt markets, the Reserve Bank Governor says.

NZ's recovery from the financial crisis is entering a "new, less fragile stage" but the Reserve Bank will keep its "foot on the gas".

Greece and the wider eurozone scrambled back from the brink of disaster again on Friday as the outline of an IMF/eurozone rescue package emerged.

Official interest rates are staying at 2.5pc but Reserve Bank governor Alan Bollard hints increases are likely 'in coming months'.

It does not inspire confidence to have wild swings in the central bank's view of the economic outlook and what it is likely to do.