KEY POINTS:
New Zealand's economic slide continued yesterday as another bank raised interest rates and a survey found people planning to cut spending because they expect leaner times.
The ASB Bank followed the lead of ANZ National in lifting its mortgage interest rates, and other banks hinted they were close
to doing the same.
A Research New Zealand poll revealed that more than half of those questioned planned to cut personal spending this year in the face of rising interest rates and petrol prices.
On Wednesday, ANZ National - New Zealand's biggest bank - increased its two-year fixed rate to 9.7 per cent and its three-year fixed rate to 9.55 per cent.
It said its hand was forced by continuing increases in the international cost of money.
ASB lifted fixed and floating interest rates by 20 basis points yesterday, and has also increased some deposit rates.
The bank's marketing chief, Jonathan Symons, blamed the rises on the increased cost of borrowing overseas, which he said was caused by uncertainty in foreign markets.
Kiwibank spokesman Bruce Thompson said anyone about to take out a home loan, or set a new rate on an existing loan, shouldn't wait.
"I think it's inevitable that we will have a small increase in our variable rate. At the moment it's below 10, and I don't think that will be sustainable.
"As to our fixed rates, we are obviously under different pressures to the Australian-owned banks because the sub-prime issue doesn't affect us."
World credit markets have been in turmoil for several months.
Westpac spokesman Craig Dowling said the bank had not moved its rates, but they were under constant review.
"We face the same pressures, by and large, as the other banks, and that will be part of the review process."
The BNZ also left its rates unchanged, but it recently warned that it expected interest rates to remain high for some time.
The Research New Zealand survey questioned 500 people this month.
The director of the opinion polling firm, Emmanuel Kalafatelis, said 54 per cent of those surveyed said their spending would be influenced by concerns over the state of the international economy.
Men and women were equally concerned about gloomy world trends.
Over-60s were least likely (39 per cent) to have their spending influenced by economic concerns, and people in their 40s were most likely (63 per cent).
"Kiwis are often warned about their high levels of credit card and personal debt, but it seems many of us do worry about money and what we should spend it on."
Meanwhile, the bank workers' union, Finsec, has called on ANZ National to justify its interest rates increase.
