July 27 Edition Of The BNZ Weekly Overview.
As had been widely anticipated the Reserve Bank left their official cash rate unchanged at 7.25% this morning and while warning that they don't believe they will need to increase again said they don't expect to be cutting it for a long time either. During the week we have learnt that the export sector is slowly improving while employment and investment intentions have improved to just below their average levels.
A soft landing remains well on track but this is bad in terms of freeing up scarce resources which means continuing inflationary risks. This means an absence of any slashing of interest rates this cycle, and means the absence of a debt fuelled consumer spending boom in a couple of years time. A soft landing in an environment of resource shortages means an eventual soft upturn.
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