Brian Fallow on the economy

Brian Fallow is the Herald's Economics Editor

Brian Fallow: OCR hike 'just the start'

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Today's interest rate hike is just the start of the cycle and we should expect further rises in April June and July, says Herald economics editor Brian Fallow.

That most likely equates to a full percentage point rise by the time of the election.

How far might it go? The Reserve Bank is projecting a interest rates 2 percentage points higher by the end of 2015. However the further out you go the less predictable things are.

As three quarters of kiwis have mortgages on floating rates or shorter so the impact will be felt quickly

Why is the Reserve Bank doing this now?

Because the strength of New Zealand's forecast growth rate is stronger than what the Bank believes the economy can handle on a sustainable basis - without inflation becoming a problem and eroding real incomes.


Read the full story of the Official Cash Rate rise here

- NZ Herald

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