OCR unchanged at 6.5 per cent

9:10 AM

The Reserve Bank has decided to leave the Official Cash Rate unchanged at 6.5 per cent.

The announcement in Wellington follows the release of the bank's August Monetary Policy Statement.

Governor Don Brash says a lot has changed since the Bank's Monetary Policy Statement in May.

He says both business and consumer confidence have fallen sharply, which appears to have led to some deferment of spending, new investment and employment.

Dr Brash says it appears the economy may have contracted slightly in the June quarter, and that growth for the September quarter may also be weak.

- IRN