NZ Herald
  • Home
  • Latest news
  • Herald NOW
  • Video
  • New Zealand
  • Sport
  • World
  • Business
  • Entertainment
  • Podcasts
  • Quizzes
  • Opinion
  • Lifestyle
  • Travel
  • Viva
  • Weather

Subscriptions

  • Herald Premium
  • Viva Premium
  • The Listener
  • BusinessDesk

Sections

  • Latest news
  • New Zealand
    • All New Zealand
    • Crime
    • Politics
    • Education
    • Open Justice
    • Scam Update
  • Herald NOW
  • On The Up
  • World
    • All World
    • Australia
    • Asia
    • UK
    • United States
    • Middle East
    • Europe
    • Pacific
  • Business
    • All Business
    • MarketsSharesCurrencyCommoditiesStock TakesCrypto
    • Markets with Madison
    • Media Insider
    • Business analysis
    • Personal financeKiwiSaverInterest ratesTaxInvestment
    • EconomyInflationGDPOfficial cash rateEmployment
    • Small business
    • Business reportsMood of the BoardroomProject AucklandSustainable business and financeCapital markets reportAgribusiness reportInfrastructure reportDynamic business
    • Deloitte Top 200 Awards
    • CompaniesAged CareAgribusinessAirlinesBanking and financeConstructionEnergyFreight and logisticsHealthcareManufacturingMedia and MarketingRetailTelecommunicationsTourism
  • Opinion
    • All Opinion
    • Analysis
    • Editorials
    • Business analysis
    • Premium opinion
    • Letters to the editor
  • Politics
  • Sport
    • All Sport
    • OlympicsParalympics
    • RugbySuper RugbyNPCAll BlacksBlack FernsRugby sevensSchool rugby
    • CricketBlack CapsWhite Ferns
    • Racing
    • NetballSilver Ferns
    • LeagueWarriorsNRL
    • FootballWellington PhoenixAuckland FCAll WhitesFootball FernsEnglish Premier League
    • GolfNZ Open
    • MotorsportFormula 1
    • Boxing
    • UFC
    • BasketballNBABreakersTall BlacksTall Ferns
    • Tennis
    • Cycling
    • Athletics
    • SailingAmerica's CupSailGP
    • Rowing
  • Lifestyle
    • All Lifestyle
    • Viva - Food, fashion & beauty
    • Society Insider
    • Royals
    • Sex & relationships
    • Food & drinkRecipesRecipe collectionsRestaurant reviewsRestaurant bookings
    • Health & wellbeing
    • Fashion & beauty
    • Pets & animals
    • The Selection - Shop the trendsShop fashionShop beautyShop entertainmentShop giftsShop home & living
    • Milford's Investing Place
  • Entertainment
    • All Entertainment
    • TV
    • MoviesMovie reviews
    • MusicMusic reviews
    • BooksBook reviews
    • Culture
    • ReviewsBook reviewsMovie reviewsMusic reviewsRestaurant reviews
  • Travel
    • All Travel
    • News
    • New ZealandNorthlandAucklandWellingtonCanterburyOtago / QueenstownNelson-TasmanBest NZ beaches
    • International travelAustraliaPacific IslandsEuropeUKUSAAfricaAsia
    • Rail holidays
    • Cruise holidays
    • Ski holidays
    • Luxury travel
    • Adventure travel
  • Kāhu Māori news
  • Environment
    • All Environment
    • Our Green Future
  • Talanoa Pacific news
  • Property
    • All Property
    • Property Insider
    • Interest rates tracker
    • Residential property listings
    • Commercial property listings
  • Health
  • Technology
    • All Technology
    • AI
    • Social media
  • Rural
    • All Rural
    • Dairy farming
    • Sheep & beef farming
    • Horticulture
    • Animal health
    • Rural business
    • Rural life
    • Rural technology
    • Opinion
    • Audio & podcasts
  • Weather forecasts
    • All Weather forecasts
    • Kaitaia
    • Whangārei
    • Dargaville
    • Auckland
    • Thames
    • Tauranga
    • Hamilton
    • Whakatāne
    • Rotorua
    • Tokoroa
    • Te Kuiti
    • Taumaranui
    • Taupō
    • Gisborne
    • New Plymouth
    • Napier
    • Hastings
    • Dannevirke
    • Whanganui
    • Palmerston North
    • Levin
    • Paraparaumu
    • Masterton
    • Wellington
    • Motueka
    • Nelson
    • Blenheim
    • Westport
    • Reefton
    • Kaikōura
    • Greymouth
    • Hokitika
    • Christchurch
    • Ashburton
    • Timaru
    • Wānaka
    • Oamaru
    • Queenstown
    • Dunedin
    • Gore
    • Invercargill
  • Meet the journalists
  • Promotions & competitions
  • OneRoof property listings
  • Driven car news

Puzzles & Quizzes

  • Puzzles
    • All Puzzles
    • Sudoku
    • Code Cracker
    • Crosswords
    • Cryptic crossword
    • Wordsearch
  • Quizzes
    • All Quizzes
    • Morning quiz
    • Afternoon quiz
    • Sports quiz

Regions

  • Northland
    • All Northland
    • Far North
    • Kaitaia
    • Kerikeri
    • Kaikohe
    • Bay of Islands
    • Whangarei
    • Dargaville
    • Kaipara
    • Mangawhai
  • Auckland
  • Waikato
    • All Waikato
    • Hamilton
    • Coromandel & Hauraki
    • Matamata & Piako
    • Cambridge
    • Te Awamutu
    • Tokoroa & South Waikato
    • Taupō & Tūrangi
  • Bay of Plenty
    • All Bay of Plenty
    • Katikati
    • Tauranga
    • Mount Maunganui
    • Pāpāmoa
    • Te Puke
    • Whakatāne
  • Rotorua
  • Hawke's Bay
    • All Hawke's Bay
    • Napier
    • Hastings
    • Havelock North
    • Central Hawke's Bay
    • Wairoa
  • Taranaki
    • All Taranaki
    • Stratford
    • New Plymouth
    • Hāwera
  • Manawatū - Whanganui
    • All Manawatū - Whanganui
    • Whanganui
    • Palmerston North
    • Manawatū
    • Tararua
    • Horowhenua
  • Wellington
    • All Wellington
    • Kapiti
    • Wairarapa
    • Upper Hutt
    • Lower Hutt
  • Nelson & Tasman
    • All Nelson & Tasman
    • Motueka
    • Nelson
    • Tasman
  • Marlborough
  • West Coast
  • Canterbury
    • All Canterbury
    • Kaikōura
    • Christchurch
    • Ashburton
    • Timaru
  • Otago
    • All Otago
    • Oamaru
    • Dunedin
    • Balclutha
    • Alexandra
    • Queenstown
    • Wanaka
  • Southland
    • All Southland
    • Invercargill
    • Gore
    • Stewart Island
  • Gisborne

Media

  • Video
    • All Video
    • NZ news video
    • Herald NOW
    • Business news video
    • Politics news video
    • Sport video
    • World news video
    • Lifestyle video
    • Entertainment video
    • Travel video
    • Markets with Madison
    • Kea Kids news
  • Podcasts
    • All Podcasts
    • The Front Page
    • On the Tiles
    • Ask me Anything
    • The Little Things
  • Cartoons
  • Photo galleries
  • Today's Paper - E-editions
  • Photo sales
  • Classifieds

NZME Network

  • Advertise with NZME
  • OneRoof
  • Driven Car Guide
  • BusinessDesk
  • Newstalk ZB
  • Sunlive
  • ZM
  • The Hits
  • Coast
  • Radio Hauraki
  • The Alternative Commentary Collective
  • Gold
  • Flava
  • iHeart Radio
  • Hokonui
  • Radio Wanaka
  • iHeartCountry New Zealand
  • Restaurant Hub
  • NZME Events

SubscribeSign In
Advertisement
Advertise with NZME.
Home / Business / Companies / Banking and finance

OCR preview: Rate hike expected this week - regardless of lockdown call

Liam Dann
By Liam Dann
Business Editor at Large·NZ Herald·
4 Oct, 2021 04:27 AM4 mins to read

Subscribe to listen

Access to Herald Premium articles require a Premium subscription. Subscribe now to listen.
Already a subscriber?  Sign in here

Listening to articles is free for open-access content—explore other articles or learn more about text-to-speech.
‌
Save

    Share this article

    Reminder, this is a Premium article and requires a subscription to read.

Reserve Bank Governor Adrian Orr. Photo / Mark Mitchell

Reserve Bank Governor Adrian Orr. Photo / Mark Mitchell

There is a heavy expectation that the Reserve Bank will finally hike the official cash rate on Wednesday, regardless of Covid alert level restrictions.

A 25 basis point OCR hike (from a record low of 0.25 per cent to 0.5 per cent) is currently fully priced in by markets and forecast by nearly every economist in the country.

For many New Zealanders, hiking now while there is still uncertainty about the path of Delta outbreak, may be jarring.

But as ANZ chief economist Sharon Zollner says: "It's a weird old time for the New Zealand economy."

"Momentum and confidence is strong, but about 40 per cent of the economy is caught in a straitjacket," she said,

Advertisement
Advertise with NZME.

"However, the RBNZ has made it clear that they do not view lockdowns as a reason not to hike the OCR, and stressed in the days following the August Monetary Policy Statement that it considered the on-hold decision to be a short delay, not a cancellation of hikes."

In fact, commentary in its last MPS had markets racing ahead to proceed in even odds of a 50 basis point hike.

That expectation was dialled back in a speech by Reserve Bank assistant governor Christian Hawkesby.

Advertisement
Advertise with NZME.

"There's a lot we still don't know – like whether the length of the current restrictions will lead to more scarring than we've previous seen," ASB chief economist Nick Tuffley said.

"But the prudent approach is to tighten monetary policy slowly, rather than keep waiting.

Discover more

Business

Business groups: Keeping Auckland border shut 'not an option'

01 Oct 04:40 AM
Opinion

Steven Joyce: Ardern Government getting too big for its bossy boots

01 Oct 04:00 PM
Tourism

Covid casualty: Top Auckland restaurant Euro to close

01 Oct 04:34 AM

The RBNZ shares that view, given assistant governor Hawkesby's comments last week about moving in 25bps increments."

Tuffley and ASB are expecting a 25bps OCR hike next week, and the same at the November and February meetings.

The bar was now set quite high for the Covid outbreak to derail hikes, ANZ's Zollner said.

The RBNZ has indicated it would need to be, on balance, a demand shock, which caused a sustained drop in business sentiment, she said.

That had not happened.

"Business sentiment has not only not stayed down – it barely fell at all! It's a picture of remarkable resilience and confidence that normal service will shortly resume," she said, citing the strength of the latest ANZ Business Outlook survey.

Advertisement
Advertise with NZME.

Westpac chief economist Michael Gordon also saw a hike coming on Wednesday and noted market expectations are for the OCR to rise to 2 per cent by late 2023.

But he sounded a note of caution.

"The common wisdom is that this lockdown will play out in the same way as previous ones: activity will be suppressed for a short period, restrictions will be lifted, demand will
quickly rebound, and the RBNZ will be back to facing the same pressures as before," he said.

"But that's not a given. As we've seen elsewhere, the Delta variant has proven much trickier to rein in, and our vaccination rate is still a long way from where it needs to be to provide effective levels of protection."

ANZ chief economist Sharon Zollner. Photo / NZME
ANZ chief economist Sharon Zollner. Photo / NZME

However, Zollner argues inflation pressure will continue to dominate policy direction.

"Even if elimination proves unattainable, there is generally cause for optimism that the economy will be able to get back most of its domestic freedoms over the summer, with lifting vaccination rates providing a pathway," she said.

Meanwhile, it was "looking increasingly like a perfect storm of global supply-side inflation pressures–oil back to US$75, coal, natural gas in Europe, China's electricity shortages, food prices, fertiliser costs, labour shortages, shipping disruptions and more," she said.

"It's looking less transitory by the day."

Zollner and ANZ are forecasting follow-up 25bp hikes in November, February, May and August next year, taking the OCR to 1.5 per cent.

• The Reserve Bank will release its Monetary Policy Review in a statement at 2pm on Wednesday.

Save

    Share this article

    Reminder, this is a Premium article and requires a subscription to read.

Latest from Banking and finance

Premium
Companies|banking and finance

NZ’s largest taxpayers revealed - does big business play fair?

01 Jul 05:00 PM
Banking and finance

Watercare secures $3.4b debt facility, largest for NZ corporate

30 Jun 05:00 PM
Personal Finance

Big Reserve Bank scheme to protect Kiwis' savings launching

29 Jun 05:00 PM

There’s more to Hawai‘i than beaches and buffets – here’s how to see it differently

sponsored
Advertisement
Advertise with NZME.

Latest from Banking and finance

Premium
NZ’s largest taxpayers revealed - does big business play fair?

NZ’s largest taxpayers revealed - does big business play fair?

01 Jul 05:00 PM

Thirteen companies each pay more than $100m in annual income taxes.

Watercare secures $3.4b debt facility, largest for NZ corporate

Watercare secures $3.4b debt facility, largest for NZ corporate

30 Jun 05:00 PM
Big Reserve Bank scheme to protect Kiwis' savings launching

Big Reserve Bank scheme to protect Kiwis' savings launching

29 Jun 05:00 PM
Former CFO of failed insurer CBL to pay $1.2m for continuous disclosure breaches

Former CFO of failed insurer CBL to pay $1.2m for continuous disclosure breaches

26 Jun 11:50 PM
From early mornings to easy living
sponsored

From early mornings to easy living

NZ Herald
  • About NZ Herald
  • Meet the journalists
  • Newsletters
  • Classifieds
  • Help & support
  • Contact us
  • House rules
  • Privacy Policy
  • Terms of use
  • Competition terms & conditions
  • Our use of AI
Subscriber Services
  • NZ Herald e-editions
  • Daily puzzles & quizzes
  • Manage your digital subscription
  • Manage your print subscription
  • Subscribe to the NZ Herald newspaper
  • Subscribe to Herald Premium
  • Gift a subscription
  • Subscriber FAQs
  • Subscription terms & conditions
  • Promotions and subscriber benefits
NZME Network
  • The New Zealand Herald
  • The Northland Age
  • The Northern Advocate
  • Waikato Herald
  • Bay of Plenty Times
  • Rotorua Daily Post
  • Hawke's Bay Today
  • Whanganui Chronicle
  • Viva
  • NZ Listener
  • Newstalk ZB
  • BusinessDesk
  • OneRoof
  • Driven Car Guide
  • iHeart Radio
  • Restaurant Hub
NZME
  • About NZME
  • NZME careers
  • Advertise with NZME
  • Digital self-service advertising
  • Book your classified ad
  • Photo sales
  • NZME Events
  • © Copyright 2025 NZME Publishing Limited
TOP