Video | Agriculture | Confidence | Economy | Energy | Employment | Finance | Media | Property | RBNZ | Science | SOEs | Tax | Technology | Telecoms | Tourism | Transport | Search


Interest rate hike questioned

Interest rate hike questioned

The surprise decision to lift interest rates today raises questions over the Reserve Bank's reading of our economic outlook, the Employers & Manufacturers Association (Northern) says.

"With the official US interest rate on hold at one per cent, today's decision must increase the upward pressure on our exchange rate," said Alasdair Thompson, EMA's chief executive.

"Life for our exporters is about to get more difficult than it already was.

"Our analysis of inflation at present is that it is resulting from high demand chasing a limited supply of goods and services. The goods in question are mainly electricity, housing and the lack of skills.

"Electricity is in short supply after years of insufficient investment in more generation capacity. But without the price of power rising, new generation capacity would not occur.

"The rising cost of new housing is in response to strong immigration. This is changing rapidly and housing stocks are likely to exceed supply before the year's end.

"It's true the lack of skills is driving up salaries and wages for some types of skilled people - our national salary survey of 94,000 job positions last year showed average pay increased 3.86%. But the concern is ongoing, many initiatives are moving to fill the gaps, and the rises have been reassuringly steady.

"The Reserve Bank appears to be overstating New Zealand's growth prospects this year. With the pressure rising on exporters the present decline in our rate of economic growth will accelerate.

"Business can take some heart from the Bank's stated desire not to raise the OCR further. If it did, we would probably be in for a hard landing."

© Scoop Media

Business Headlines | Sci-Tech Headlines


Mycoplasma Bovis: More Properties Positive

One of the latest infected properties is in the Hastings district, the other three are within a farming enterprise in Winton. The suspect property is near Ashburton. More>>


Manawatū Gorge Alternative: More Work Needed To Choose Route

“We are currently working closely and in partnership with local councils and other stakeholders to make the right long-term decision. It’s vital we have strong support on the new route as it will represent a very significant long-term investment and it will need to serve the region and the country for decades to come.” More>>


RBNZ: Super Fund Chief To Be New Reserve Bank Governor

Adrian Orr has been appointed as Reserve Bank Governor effective from 27 March 2018, Finance Minister Grant Robertson says. More>>


ScoopPro: Helping PR Professionals Get More Out Of Scoop has been a fixture of New Zealand’s news and Public Relations infrastructure for over 18 years. However, without the financial assistance of those using Scoop in a professional context in key sectors such as Public Relations and media, Scoop will not be able to continue this service... More>>

Insurance: 2017 Worst Year On Record For Weather-Related Losses

The Insurance Council of New Zealand (ICNZ) announced today that 2017 has been the most expensive year on record for weather-related losses, with a total insured-losses value of more than $242 million. More>>