• Last week the RBNZ kept the OCR on hold at 2.5%.  The RBNZ’s September Monetary Policy Statement contained a more realistic scenario for NZ’s recovery from recession, based off a higher NZD, slower recovery in exports and faster (but still very weak) consumer spending growth.  With that shift in the mix of growth came renewed warnings of the danger of a household-led recovery.
• We expect the RBNZ will hike the OCR by June next year (previously July).  The RBNZ is very unlikely to stand in the way of any further climbs in the NZD and wholesale interest rates.  In the absence of a circuit breaker we expect those rates to continue trending up.

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