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

 

Interest Rates Hike Talk Baseless

November 27th, 2000

There are no sound reasons within a six month horizon why interest rates should go up as some commentators are suggesting, says the Employers & Manufacturers Association (Northern).

"Talk of impending interest rate hikes are ill founded and border on scare mongering," said Bruce Goldsworthy, Director of EMA's Manufacturers Division.

"World prices for our agricultural commodities are high at this point in the cycle, as is the oil price, but the inflation they are causing does not have to translate into higher interest rates as it won't continue in the longer term.

"Reserve Bank Governor Don Brash made this much very clear when he stated higher interest rates would be considered only if this inflation was fed through into pay rises.

"There is no evidence overall that this is occurring.

"Our information is that pay rounds are being settled at around two per cent per annum. Only public sector groups in health and education are making higher pay demands.

"Otherwise New Zealanders are showing remarkable restraint by forgoing short term gains for longer term opportunities.

"Other anti inflation factors are also coming into play. These include:
* if trading banks forecasts prove correct and the exchange rate rises over the next two quarters, the price of imports will lessen.
* retail stocks are 9.3 per cent higher in September than last year indicating consumer demand is already soft.
* though our producer's margins are being squeezed, they have absorbed some of these extra costs, which reflects the price competition prevalent on the domestic market.

"With these factors in mind we can only surmise why the trading banks are seeking to talk up interest rates."

Comments: Bruce Goldsworthy tel 09 367 0948 (bus) 09 522 2723 (hme)


© Scoop Media

 
 
 
Business Headlines | Sci-Tech Headlines

 


Retail: New Law Paves Way For Greater Supermarket Competition

Legislation that bans major supermarkets from blocking their competitors’ access to land to set up new stores paves the way for greater competition in the sector, Minister of Commerce and Consumer Affairs Dr David Clark said... More>>



International Business Forum: NZ EU FTA Coming Down To The Wire – Hold The Line

As negotiations accelerate to conclude an ambitious free trade agreement between New Zealand and the European Union, the NZ International Business Forum (NZIBF), representing a cross section of major exporters... More>>


MBIE: NZ space sector set to star in Moon mission
The New Zealand space sector is set to star in NASA’s CAPSTONE moon mission – with Rocket Lab launching a satellite to the Moon from New Zealand in June, and the lift-off of a separate NASA-NZ lunar research project... More>>



MYOB: New Data Shows Increase In SMEs Experiencing Stress And Anxiety

The lingering impacts of the COVID-19 pandemic have led to a surge in the number of local SME owners and operators experiencing stress and anxiety, according to new research from business management platform, MYOB... More>>



Carbonz: Cashing In On Carbon: The New Marketplace Helping Native Forest To Thrive

The country’s first voluntary carbon credit marketplace, Carbonz, is here to restore native biodiversity and help Aotearoa reach its carbon zero goals by selling the first carbon credits exclusively from native forest... More>>
Entrust District: Dividend Will Be Welcomed After Another Tough Year
We’ve all heard of the saying; “if it sounds too good to be true, it probably is” but for Aucklanders within the Entrust District, getting their share of Entrust’s 2022 annual dividend payment really is as good as it sounds... More>>