PHOTO: ANZ previously forecast the OCR to peak at 2 percent in August this year. Photo: RNZ / Dom Thomas
The country’s biggest bank is forecasting the Official Cash Rate to be lifted to 3 percent by April next year – the highest since 2015.
The ANZ Bank said it had changed its outlook because of strong inflationary pressures and in particular the tight supply of labour.
Inflation hit its highest level in a decade in the September quarter, as consumer prices rose 2.2 percent, taking the annual rate to 4.9 percent.
The Reserve Bank (RBNZ) began lifting the OCR in October last year to counter inflation pressures, with two consecutive 25 basis point (a quarter of a percentage point) increases to 0.75 percent in November.
ANZ previously forecast the OCR to peak at 2 percent in August this year.
But that has now changed, with the labour shortages unlikely to be resolved any time soon, its chief economist, Sharon Zollner, said.
“The unemployment rate could even start with a two within the next six months so that suggests quite a lot of wage pressure.”
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