Chief executives from Foodstuffs, Mainfreight, Mitre10 and Mercury with their hot takes at Mood of the Boardroom 2025. Video / Michael Craig
A strong majority of business leaders back the Reserve Bank cutting interest rates further to support the economy. In the Herald’s Mood of the Boardroom survey, 78% say the official cash rate (OCR) should continue to fall, while just 11% oppose further cuts and 11% are unsure.
The OCR wasmost recently cut by 25 basis points to 3.00% in August 2025 – its lowest level since 2022, reflecting ongoing efforts by the Reserve Bank to support a sluggish economy.
The OCR has been on a steady downward trajectory since August last year, with multiple cuts already enacted and potential further reductions likely before the end of the year.
Many CEOs see lower rates as essential to kick-start growth. “It is critical if NZ is going to get moving again that interest rates come down, and much faster than the current plan,” said one respondent. Another added, “2.50% to get the economy firing again.” Several argued that cuts would only be effective if paired with more supportive bank lending and other government policies to ease cost pressures.
Others urged caution. “Rate cuts alone don’t seem to be shifting the dial,” said one executive, who stressed that long-term stability matters as much as short-term relief. Another noted, “The OCR is neutral at present. Weak growth says cut more, but there seems to be an undercurrent of pricing pressures too.”
Inflation concerns were a recurring theme. “The Reserve Bank should only reduce the OCR if it believes that is compatible with its objective of keeping inflation at between 1–3%,” said one business leader. Another warned, “We certainly would not want to go back to the inflation experience of the post-Covid time.”
Some respondents expressed frustration with the central bank’s culture and communication. “They have been too slow to cut rates and should move more swiftly,” said an SME boss, while another criticised the bank for being “very inaccessible and detached from the business community.”
A few executives stressed that monetary policy cannot carry the load alone. “Yes, but not in isolation — pair rate cuts with sensible lending settings so banks can responsibly back first-home and other buyers,” suggested one. Another added: “The OCR is not the only solution.”
