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Written By: Steve Pierson - Date published: 12:43 pm, January 29th, 2009 - 5 comments
Another review of the Official Cash Rate, another record cut. This time, it’s a 1.5% cut bringing the OCR to 3.5%. That’s the lowest rate since the OCR was introduced in 1999. Good news for those with floating rate mortgages (not so good for the 80% of mortgagees with a fixed rate) and an opportunity for me to feel …
Written By: Steve Pierson - Date published: 10:05 am, December 4th, 2008 - 14 comments
The Reserve Bank has cut 1.5% off the official cash rate, bringing it down to 5%. The rate has now been cut 2.5% in just six weeks, an unprecendented slashing. Mortgage rates will drop as well, but perhaps not by as much because the banks (excluding Kiwibank) have to borrow most of their money from …
Written By: Steve Pierson - Date published: 9:02 am, October 23rd, 2008 - 30 comments
The OCR is down from 7.5% to 6.5%. That’s an unprecendented cut in one go and further confirmation that we are entering tough economic times. Inflation has been high but the Reserve Bank thinks the increasingly likely global recession will remove inflationary pressure. Keeping the economy going will be the challenge.
Written By: Steve Pierson - Date published: 1:18 pm, October 21st, 2008 - 21 comments
Inflation hit 5.1% for the year to September driven by the mammoth spike in oil, food, and other commodity which has abated since then, for now.
There is nothing that could be done to avoid this impact on New Zealand from international markets. The economy is already in recession, and now would be the worst time …
Written By: Steve Pierson - Date published: 10:52 am, July 24th, 2008 - 20 comments
The Reserve Bank has dropped the Official Cash Rate from 8.25% to 8%. Inflation is well outside the Bank’s 1-3% target range but there appears to be a recognition that there’s no point strangling our economy with high interest rates when that can’t bring down international oil and food prices.
Don’t expect mortgage rates to instantly …
Written By: Steve Pierson - Date published: 12:27 pm, July 15th, 2008 - 18 comments
Inflation was 1.6% in the last quarter, 4% annually, the highest in 13 years.
Petrol is driving inflation. By itself petrol accounted for a 1.2% increase. Food is the other big increase, also accounting for a 1.2% and that is itself being driven by international oil prices. The price of oil is beyond our control and …
Written By: Steve Pierson - Date published: 11:37 am, June 5th, 2008 - 14 comments
The Reserve Bank has left the Official Cash Rate unchanged; no-one expected a rate cut this early.
It’s encouraging that Bollard has firmly signalled that interest rates will be coming down this year despite projected inflation reaching 4.7% in the September Quarter. There’s no use in the Reserve Bank strangling our economy with high interest rates …
Written By: Steve Pierson - Date published: 12:30 pm, May 19th, 2008 - 77 comments
Discovering National’s policy is a bit like the old art of Kremlinology, when Western intelligence agencies would attempt to discover the inner workings of Soviet politics by looking at who stood next to whom in pictures, and what hand politburo members carried their briefcases in. The latest subtle signs from National regarding its tax policy …
Written By: Steve Pierson - Date published: 1:59 pm, May 16th, 2008 - 23 comments
The economy is clearly slowing. Fundamentally, it remains strong with high employment, good wages rises, and strong prices for our exports but employment and retail spending both declined in the first quarter of this year, the housing market is flat, and there is a danger that if the Reserve Bank keeps its foot on our …
Written By: Steve Pierson - Date published: 2:34 pm, May 2nd, 2008 - 29 comments
Today, ANZ and National Bank announced they are lifting their variable mortgage rates another quarter of a percent to 10.95%. That comes a week after the two banks, which are jointly owned, announced a net profit of $520 million in six months, up 7% on the previous period. Yesterday, Westpac announced a $244 million profit, …
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