The Front Page: Should we be spending less this Christmas season?

Are we likely to see the same rush on shopping malls this Christmas season that we have in years past? Photo / Getty Images.

December has arrived, and with it comes the realisation for many that Christmas is right around the corner.

While this is normally a time of year when we all flock to the shops and various sales, the cost-of-living crisis and inflation concerns mean that we are unlikely to see the same rush on shopping malls that we have in years past.

Last week, the Reserve Bank increased the Official Cash Rate to 4.25 per cent, its highest level since 2008. In his speech making the announcement, Reserve Bank Governor Adrian Orr made pointed remarks that New Zealanders need to decrease spending to help get inflation under control.

“New Zealand to date, household spending has remained very resilient. However, aggregate demand continues to outstrip New Zealand’s capacity to supply goods and services. So subsequently, the committee members agreed that monetary conditions need to tighten further, so as to be confident that we have sufficient restraint on spending to bring inflation back to that 1 and 3 per cent target range.”

His words, combined with the cost of living crisis, have already had an impact, with figures from payment network Worldline New Zealand showing that Black Friday sales last week were down 6.9 per cent on 2021.

However, calls to spend less this year are easier said than done, especially for parents or people in large families.

On today’s episode of The Front Page, the NZ Herald’s daily news podcast, business editor at large Liam Dann joins to discuss what’s going on in the economy right now, and why the Reserve Bank wants us to spend less.

And later, Sasha Lockley, CEO and co-founder of social lender Money Sweetspot, talks about making the most of what you’ve got over the Christmas period, and how to avoid falling into debt or sales tricks over the next few weeks so you don’t wake up to a financial Christmas hangover in 2023.

Listen to the full episode above