Sharechat Logo

OCR unchanged at 8.25 %

Thursday 6th December 2007

Text too small?
The Official Cash Rate (OCR) will remain unchanged at 8.25 %.

Reserve Bank Governor Alan Bollard said: "Economic activity has occurred largely as outlined in the September Monetary Policy Statement.

Capacity pressures - particularly in the labour market - remain significant, while the housing market has clearly slowed. A substantial income boost is still expected to occur through 2008, as recent dairy price gains reach farmers.

"Nevertheless, the outlook has changed somewhat due to recent developments. Oil prices, which are nearly 30 % higher than we assumed in September, and rapidly rising global food prices are likely to result in headline inflation above 3 % for much of next year.

In the medium term, despite ongoing fiscal surpluses, the likelihood of future personal tax cuts adds to the inflation outlook.

"There are considerable risks around our view. The price effects of the Government's proposed emissions trading scheme add upside risk to inflation. Global financial markets remain unusually turbulent, posing significant downside risk for some of our key trading partner economies.

"Overall, inflationary pressures have increased, and interest rates are now likely to remain around current levels for longer than previously thought.

We believe that the current level of the OCR remains consistent with future inflation outcomes of 1 to 3 % on average over the medium term, based on the information to hand at present."

For more of the week's top news stories for financial advisers. Visit www.goodreturns.co.nz
  General Finance Advertising    

Comments from our readers

No comments yet

Add your comment:
Your name:
Your email:
Not displayed to the public
Comment:
Comments to Sharechat go through an approval process. Comments which are defamatory, abusive or in some way deemed inappropriate will not be approved. It is allowable to use some form of non-de-plume for your name, however we recommend real email addresses are used. Comments from free email addresses such as Gmail, Yahoo, Hotmail, etc may not be approved.

Related News:

Transpower sees no risk to credit metrics from incentive change
NZ dollar rises, an outlier amid rising Gulf tensions
Craigmore spends $32M to expand Kerikeri kiwifruit crop by 'more than a third'
CentrePort eyes further hub expansion
South Port beats guidance, earnings in line with 2018 record
Plexure sees revenue growth from White Castle deal
22nd July 2019 Morning Report
NZ dollar treading water as markets focus on Iran
MARKET CLOSE: NZ shares extend gain as passive funds bolster prices; Tourism Holdings climbs
NZ dollar headed for 1.3% weekly gain on expectations of a Fed rate cut

IRG See IRG research reports