ocr hike

The Budget's being described as the straw that will break the camel's back on pushing up the Official Cash Rate.

Bank economists are predicting bigger interest rate hikes after the release of Finance Minister Grant Robertson's annual spending programme yesterday.

BNZ Head of Research Stephen Toplis says that there were already several reasons for the Central Bank to keep lifting the OCR.

He says they were on the verge of forecasting another rate increase, but there was more stimulus in the Budget than expected, which tipped them over the edge.

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The Australian Reserve Bank has taken economists by surprise and lifted key interest rates.

Australia's OCR has been raised by 25 basis points to 3.85 percent, defying predictions the RBA would pause rate hikes for a second month.

HSBC Chief Economist Paul Bloxham was surprised by this increase, as he expected the RBA would extend the pause to assess the impact of earlier hikes on the economy.

"If they needed time to assess, it was probably going to take a little bit longer than a month. But in the end, the RBA's determined today that they think they need to go a bit further."

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The Reserve Bank has today lifted the Official Cash Rate by 50 basis points to 5.25 per cent.

This is the 11th successive increase, and economists are concerned that this higher-than-expected hike will tip the country into recession.

Milford Asset Management portfolio manager Katlyn Parker says short-term interest rates were driven up and currency was stronger off the back of the unexpectedly high increase.

"You would have to question whether this will persist in the coming days, given the size of the hike we received today. That does increase the probability of a hard landing and a more severe recession."

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The Reserve Bank has lifted the OCR by 50 basis points to 4.75 percent.

In the lead-up, plenty of people were calling for the Reserve Bank to pause the rate hike in wake of Cyclone Gabrielle.

Milford Asset Management's Katlyn Parker says that both the Finance Minister and Governor of RBNZ agreed that a targeted fiscal policy would best assist with recent tragic events.

Katlyn Parker says that inflation is still running too high and it was important for the RBNZ to stay the course.

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Today on The Huddle: Ben Thomas from Ben Thomas PR and Jack Tame from ZB's Saturday Mornings and Q&A joined in on a discussion about the following topics:

Ian Foster did an interview this morning about his status as the All Blacks coach- how bad do we feel for him? Is NZR a bad employer?

Should the OCR hike have happened today in wake of the cyclone? Was the Reserve Bank in a no-win situation no matter what? 

Auckland Council is being urged to charge an annual $500 fee for the right to park on the streets of Auckland- is this a good decision? 

Is Christchurch a cooler city than Wellington?

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The Reserve Bank is expected to deliver their latest OCR announcement tomorrow.

Economists are still predicting a a rate hike of 50 basis points, but many are calling for the announcement to be delayed.

Kiwibank in particular has insisted that the predicted rate hike should be delayed altogether in wake of Cyclone Gabrielle.

HSBC Chief Economist Paul Bloxham says that The Reserve Bank will go ahead with a rate rise because inflation is still too high and getting it down is the Bank's main long-term goal.

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Today on The Huddle, Trish Sherson from Sherson Willis PR and Ali Jones from Red PR joined in on a discussion about the following issues of the day:

How do we feel about the Government's response to Cyclone Gabrielle? Is today the day the nation comes to terms with the deaths involved with the disaster?

Should the OCR decision be delayed after Cyclone Gabrielle? Would this lead to inflation going up?

Simon Bridges recently said that a population of 10 million would serve New Zealand well. Could the nation handle all those people, or would upgrades need to take place?

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There are suggestions the next Official Cash Rate increase will be 50 basis points.

Latest figures from the December quarter show the unemployment rate has risen slightly to 3.4 percent, which was higher than expected.

It's sparked speculation from major banks that the next OCR hike to cool inflation will be lower, rather than the predicted 75 basis points.

NZ Herald Wellington business editor Jenee Tibshraeny says people might be tempted to celebrate, but a 50 percent basis point hike is still a significant increase.

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There are suggestions the next Official Cash Rate increase will be 50 basis points.

Latest figures from the December quarter show the unemployment rate has risen slightly to 3.4 percent, which was higher than expected.

It's sparked speculation from major banks that the next OCR hike to cool inflation will be lower, rather than the predicted 75 basis points.

NZ Herald Wellington business editor Jenee Tibshraeny says people might be tempted to celebrate, but a 50 percent basis point hike is still a significant increase.

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New Zealand's annual Consumer Price Index (CPI) has remained steady this December quarter, leading banks to believe inflation may have peaked.

ANZ, Kiwibank, and Westpac have rethought their OCR outlooks ahead of February's OCR movement, according to NZ Herald Wellington business editor Jenee Tibshraeney.

Jenee Tibshraeney says that economists from these leading banks now believe the Reserve Bank might not need to hike the OCR as aggressively as predicted, which could be easier on Kiwi households.

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The New Zealand GDP figures have surpassed expectations by going up 2 percent, but it may come with consequences.

This economic growth was helped by a surge in service activity, international tourism and exports following the borders opening and Covid-19 restrictions easing up. Service industries, warehousing, and transport were among the leading forces in growth.

Economists had predicted a 0.9 percent increase, and the 2 percent increase is far beyond what they predicted, but NZ Herald business editor Liam Dann warns that this growth may force a higher OCR hike come February.

Liam Dann says these numbers are good, but households will be in for a tough 2023 as the economy slows down and the economic downturn sets in.

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