The NZIER shadow board believes Reserve Bank governor Graeme Wheeler should leave the official cash rate on hold at 2.5 per cent on Thursday, but the margin by which they prefer that to a rate cut is narrow.

The board is a panel of nine economists and business leaders set up by the New Zealand Institute of Economic Research who are asked to give a percentage value for how much they prefer each interest rate the governor might go for.

The results are then aggregated to give a collective view which serves as an indicator of how convinced they are of the preferred option and how they see the distribution of risks around it.

The board placed a 56 per cent weight on keeping rates on hold and slightly more than 40 per cent on lower rates, Kirdan Lees, NZIER's head of public good research, said.


Ahead of the October OCR decision the split was 53 per cent for keeping rates on hold and 45 per cent for a cut.

Lees said recent domestic data had been mixed. "Unemployment rose sharply and surveyed measures of inflation have eased, suggesting there is ample capacity for the economy to grow without strong economy-wide price rises. However, there are pockets of price pressures emerging in the Auckland housing market and the Canterbury construction sector as the rebuild comes on line."

ANZ chief economist Cameron Bagrie, a panel member, said the economy had hit a pothole in the September quarter. But while the global scene was uncertain, the risks of a meltdown had receded, commodity prices had improved, banks' funding costs had eased and China's growth prospects had stabilised.