Category: Business

Source: Radio New Zealand

New Reserve Bank Governor Anna Breman will not hesitate again to issue a statement for markets to understand how she interprets the economy.

Breman sat down for an extensive interview with Morning Report presenter and incoming RNZ business editor Corin Dann, just a day after she took the unusual step of issuing a statement about financial conditions, which she believed had gone “beyond” the RBNZ’s recent projection for interest rates.

It came on the heels of some banks raising interest rates, believing the bank may raise the official cash rate, despite it cutting the OCR to 2.25 percent late last month.

“Financial market conditions have tightened since the November decision, beyond what is implied by our central projection for the OCR,” she said in the statement. There was still the possibility of another rate cut from the path forward published in the bank’s November Monetary Policy Statement.

Breman told RNZ it was important for markets to understand how she was reading the economic data.

“I am rather new in my role – still just about two weeks into it – and I thought given that it’s a long time until the next monetary policy meeting in February, I thought it was reasonable for markets to see how I read the economic data and also to see how I relate compared to the last Monetary Policy Statement.”

She said she did not want to say whether markets were right or wrong, but the forecast the Reserve Bank had for the official cash rate was different to how the market reacted.

“So there is still a small probability, but it’s still a probability, that we’ll do another rate cut in the near term. We will get much more information how the economy is evolving over just the coming days. We’ll get GDP numbers, we get inflation numbers out in January and all of this will be important when we go into our next meeting.”

Breman – a Swedish economist who was First Deputy Governor of the central bank of Sweden until taking over NZ Reserve Bank Governor on 1 December – said she would not hesitate to make a statement again. She said transparency was important.

“Given I am new in my role, if I comment on monetary policy, I do want everyone to have that information at the same time.”

Covid

Breman described how she had been part of the monetary policy response for the Sveriges Riksbank, Sweden’s central bank. The country was known for responding quite differently in the Covid crisis to New Zealand – the Ardern government here pursued an elimination strategy, Sweden’s was more of a light touch.

“I was in the room when we made monetary policy decisions during Covid and we saw a deep recession coming. We saw even though maybe there were differences in exactly how the restrictions and the lockdown was done, we saw the economy almost in free fall.

“So it was a very severe situation and we acted to support the economy in different ways. So I think in that respect, all countries experienced a lot of both, obviously human suffering but also suffering in terms of economic loss because of the pandemic.”

In a wide-ranging interview, she was asked about the state of the New Zealand economy after Covid.

“I think that what we’re seeing now is that New Zealand has had several years with weak growth, a weak labour market, and we’re starting to see the economy recovering.

“And from my perspective, given that we see inflation also falling and being low and stable going forward, it’s very important now that we see growth that’s lasting, that we see that we have a period where growth is coming back. We see stronger labour markets while of course keeping inflation low and stable. So it’s very important and that’s also why I wanted to stress (in my statement yesterday) that the cut that the Reserve Bank did in late November that was really to support economic growth going forward.”

Cash

Breman believed it was important that people continued to have access to cash.

In a statement in November, the Reserve Bank said its research showed 80 percent of adults use cash sometimes, over half (56 percent) store cash and 8 percent rely on cash.

Breman said: “It is very important that people still have access to cash and as part of our job to ensure that. And the two parts of it is for financial inclusion. People need to be able to pay and sometimes cash is the best option. It’s also crisis preparedness. We saw that with the cyclones. There could be other reasons why the digital systems are vulnerable to attacks. So having cash in a society is important and that’s one of the things that we’re working with.”

Watch the full interview on rnz.co.nz on Wednesday morning

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– Published by EveningReport.nz and AsiaPacificReport.nz, see: MIL OSI in partnership with Radio New Zealand

Source: Radio New Zealand

• Food prices fall for the third consecutive month, but higher than a year ago
• Fruit and vegetables drive food prices lower
• Fuel, accommodation & airfares puts pressure on overall prices, offsetting food price decreases

Food price pressures eased in November amid a sharp fall in the price of fruit and vegetables, but remain considerably higher than a year ago.

Stats NZ numbers showed food prices easing 0.4 percent in November from the month before, the third consecutive monthly fall.

But on an annual basis, food prices were 4.4 percent higher than a year ago, compared to a 4.7 percent increase in the October year.

Fruit and vegetable prices fell 4.5 percent last month owing to seasonal produce like tomatoes and berries, but were 3.7 percent higher than a year ago.

Prices for dairy, red meat, and other staples like bread also remained significantly higher than a year ago.

Stats NZ said a typical two-litre bottle of milk cost $4.91, up nearly 16 percent from a year ago, while porterhouse/sirloin beef stake was up more than a quarter from a year ago to $45.39 per kilogram.

Petrol prices were nearly 3 percent higher than a year ago, and domestic air transport fares rose more than 6 percent monthly, but were more than 14 percent below a year ago.

BNZ head of research Stephen Toplis said the latest price data – which made up close to half of the overall consumer price basket – did not alter its forecast for fourth quarter inflation.

BNZ projected annual inflation to ease from 3 percent to 2.8 percent in the three months ending December.

Toplis said there were “familiar themes” in the latest data.

“Annual energy price inflation remains very high, food price inflation is elevated but easing, rent inflation continues to ease to new multi-year lows,” he said.

Rent price increases slowed to be 1.4 percent higher than a year ago.

“We have long thought annual rent inflation would ease and we still think it has further to go,” Toplis said.

Westpac senior economist Satish Ranchhod said the November price data was a bit firmer than expected, largely due to the volatile travel categories.

“We expect both tradables and non-tradables inflation will be a bit hotter than the RBNZ expects in the December quarter, with tradable prices accounting for most of that difference,” he said.

Westpac expected inflation to ease gradually to be “comfortably” within the RBNZ’s 2-3 percent target band by mid-2026.

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– Published by EveningReport.nz and AsiaPacificReport.nz, see: MIL OSI in partnership with Radio New Zealand

Source: Radio New Zealand

Shoppers are being told to “swerve” any unreasonable surcharges they encounter this Christmas.

Since 1 December, new limits have applied to interchange fees, which a retailer’s bank pays to a shopper’s bank when they use a card.

This means savings for businesses but Consumer NZ spokesperson Jessica Walker told Midday Report her organisation was worried it was not always flowing through to savings for shoppers.

She said people should not pay more than 1.2 percent or 1.3 percent in surcharges now.

“Anything close to 2 percent is likely to be excessive. We want consumers to be on the lookout.”

She said New Zealand’s guidelines required retailers to offer shoppers a way to pay that did not incur a surcharge, such as cash or inserting or swiping a card. People who were worried they were going to be charged too high a surcharge should use a different payment method, she said.

“If you see a fee of 2 percent or more, swerve it.”

Walker said there were also cases where surcharges were not appropriately disclosed.

Shoppers should ask the retailer whether there would be a surcharge and how much it would be, she said.

Walker said Consumer was “always” getting complaints about excessive surcharges and had not seen a change in that yet.

Some businesses might not have updated their systems, she said.

“We’re wanting people to be aware of this. Businesses are going to be saving money. We understand the fees are now comparable with some of the lowest in the world so it’s only fair that the saving is passed on to consumers.”

Walker said estimates were that New Zealanders were paying anything from $45 million to $65m a year in excessive surcharges.

“Anything that can be done to protect consumers is a good thing. This is something we want to bring to the public consciousness if they are spending more over coming weeks and months.”

Meanwhile, it has been reported that retailers want to push the government to ease its plans for a hardline ban on in-store surcharges.

“Our members have been really unhappy about it. We’ve surveyed all our members and we’ve been talking about it for a while and they’re really clear that it’s not something that they support,” Retail NZ chief executive Carolyn Young said.

Young hoped to convince the government to compromise by capping surcharges instead of banning them entirely.

“What we’re trying to do is provide a solution that’s a middle ground that should appease everyone,” she said.

Her proposal was for surcharges on debit card transactions to be capped at 0.5 percent, and for credit cards to be capped at 1 percent.

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– Published by EveningReport.nz and AsiaPacificReport.nz, see: MIL OSI in partnership with Radio New Zealand

Source: Radio New Zealand

Finance Minister Nicola Willis is doubling down on her “disciplined” plan for returning the books to surplus – despite new forecasts delaying it by yet another year.

And she took aim at those advocating for sharper spending cuts, such as the Taxpayers’ Union, warning that that prescription would deliver “human misery”.

“We are sticking to our strategy,” Willis said. “Not over-reacting to movements in the forecasts.”

Treasury’s half-year update, published on Tuesday, predicted a return to surplus in 2029/30 – a year later than its forecasts in May. That’s using the coalition’s new OBEGALx calculation which excludes ACC.

“I wouldn’t get too wound up about small changes,” Willis told reporters. She said she would continue to aim for a surplus by 2028/29.

“We are on target to return the books to surplus faster than Australia, the United Kingdom, Canada and many other advanced economies, while maintaining a prudent debt position.”

In her budget policy statement, released alongside Treasury’s update, Willis confirmed she would stick to her previously signalled operating allowance of $2.4 billion.

Existing pre-commitments meant that left just $1b a year on average for spending on new initiatives in next year’s Budget.

“Most agencies and ministers will need to plan to manage service pressures and other commitments with little or no additional funding,” Willis said.

Willis noted the downward revisions to forecasts were “relatively modest” but acknowledged they followed a similar trend over the past two years due to factors “outside the government’s direct control”.

The Taxpayers’ Union last week launched a campaign calling for Willis to cut public spending and debt more aggressively, accusing her of simply continuing the previous Labour government’s “sugar-rush economics”.

It prompted Willis to throw down the gauntlet, challenging its chair Ruth Richardson – a former finance minister – to debate her “anytime, anywhere” on the government’s finances.

The two have since been locked in negotiations over the conditions for the debate, including [

https://www.rnz.co.nz/news/political/581707/ruth-richardson-still-willing-to-debate-nicola-willis-after-dispute-over-venue time, location and moderator.]

Speaking on Tuesday, Willis said she had no update on that showdown but was still up for the debate.

“The offer is there. Thursday afternoon, I’m available. Friday morning, I’m available. I don’t really care who the moderator is. If they want to turn up, I’m ready.”

Willis explicitly nodded to the “shorter, sharper fiscal consolidation” being advocated by the Taxpayers’ Union.

She said while that would speed up the return to surplus, it could also hurt frontline public services and depress already-weak demand in a recovering economy.

Willis pointed out that the Taxpayers’ Union proposed scrapping all Working for Families tax credits, reducing recipients’ average weekly incomes by about $180.

She said beneficiaries and low-income families would bear the brunt of that change, delivering “a level of human misery” that she was not prepared to tolerate.

Willis said, on the other hand, Labour’s approach to spending was “reckless” and would further delay a return to surplus.

She said the government had delivered about $11b a year in savings during its term.

“Without this disciplined approach, this year’s deficit would be $25 billion and debt would be on track to blow out to 59 percent of GDP,” she said.

Willis promised to release more details to prove that: “We have the receipts.”

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– Published by EveningReport.nz and AsiaPacificReport.nz, see: MIL OSI in partnership with Radio New Zealand

Source: Radio New Zealand

• Return to budget surplus delayed a year until 2030
• Deficits forecast to be bigger because slow economic recovery
• Growth forecast below 1 pct this year rising to more than 3 pct in 2027
• Debt expect to peak later and higher
• Finance Minister Willis says further spending discipline needed

The government’s financial position is looking worse for longer with a delay in getting to surplus and bigger deficits, according to new Treasury forecasts.

The Half Year Economic and Fiscal Update (HYEFU) showed the expected deficit for the year to next June would be $13.9 billion, $1.8bn worse than forecast in May, with no surplus now forecast until 2029/30.

The downward revisions reflected a slower economy, lower tax take, higher debt costs, but steady expenses.

Finance Minister Nicola Willis said the government was continuing to repair the books and the revisions should not be over emphasised.

“It’s the path to surplus that counts.”

She said the government was looking for the economy to get “fresh air in its lungs” and recover strongly from 2027 onwards which would boost the tax take.

Willis said the government would run a tight financial regime, with the amount of money available for new spending next year to remain capped at $2.4b, but it was determined to get back to surplus a year earlier than Treasury’s forecasts.

The Treasury forecasts generally showed an economy hitting a peak of growth at 3.4 percent in 2027 before easing back to around 2.5 percent for the next three years, while inflation eases back to around 2 percent over the forecast period, with unemployment also easing below 5 percent.

Treasury said it was basing its forecasts on a pick up in housing, an increase in migration, and continued solid export trade, but saw risks to its forecasts in both directions.

The positive risks included the economic recovery being quicker and stronger than anticipated, while the downside risks were that the recovery was softer as consumers and businesses remained cautious.

Net debt was forecast to peak at 46.9 percent of GDP in 2028/29 before edging lower from 2030.

The Debt Management Office reduced the borrowing programme by $5bn over the next two years, but increased it by $8bn in total in 2027 and 2028.

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– Published by EveningReport.nz and AsiaPacificReport.nz, see: MIL OSI in partnership with Radio New Zealand

Source: Radio New Zealand

Finance Minister Nicola Willis is doubling down on her “disciplined” plan for returning the books to surplus – despite new forecasts delaying it by yet another year.

And she took aim at those advocating for sharper spending cuts, such as the Taxpayers’ Union, warning that that prescription would deliver “human misery”.

“We are sticking to our strategy,” Willis said. “Not over-reacting to movements in the forecasts.”

Treasury’s half-year update, published on Tuesday, predicted a return to surplus in 2029/30, a year later than its forecasts in May. That’s using the coalition’s new OBEGALx calculation which excludes ACC.

“I wouldn’t get too wound up about small changes,” Willis told reporters. She said she would continue to aim for a surplus by 2028/29.

“We are on target to return the books to surplus faster than Australia, the United Kingdom, Canada and many other advanced economies, while maintaining a prudent debt position.”

In her budget policy statement, released alongside Treasury’s update, Willis confirmed she would stick to her previously signalled operating allowance of $2.4 billion.

Existing pre-commitments meant that left just $1b a year on average for spending on new initiatives in next year’s Budget.

“Most agencies and Ministers will need to plan to manage service pressures and other commitments with little or no additional funding,” Willis said.

Willis noted the downward revisions to forecasts were “relatively modest” but acknowledged they followed a similar trend over the past two years due to factors “outside the government’s direct control”.

The Taxpayers’ Union last week launched a campaign calling for Willis to cut public spending and debt more aggressively, accusing her of simply continuing the previous Labour government’s “sugar-rush economics”.

It prompted Willis to throw down the gauntlet, challenging its chair Ruth Richardson – a former finance minister – to debate her “anytime, anywhere” on the government’s finances.

The two have since been locked in negotiations over the conditions for the debate, including [

https://www.rnz.co.nz/news/political/581707/ruth-richardson-still-willing-to-debate-nicola-willis-after-dispute-over-venue time, location and moderator.]

Speaking on Tuesday, Willis said she had no update on that showdown but was still up for the debate.

“The offer is there. Thursday afternoon, I’m available. Friday morning, I’m available. I don’t really care who the moderator is. If they want to turn up, I’m ready.”

Willis explicitly nodded to the “shorter, sharper fiscal consolidation” being advocated by the Taxpayers’ Union.

She said while that would speed up the return to surplus, it could also hurt frontline public services and depress already-weak demand in a recovering economy.

Willis pointed out that the Taxpayers’ Union proposed scrapping all Working for Families tax credits, reducing recipients’ average weekly incomes by about $180.

She said beneficiaries and low-income families would bear the brunt of that change, delivering “a level of human misery” that she was not prepared to tolerate.

Willis said, on the other hand, Labour’s approach to spending was “reckless” and would further delay a return to surplus.

She said the government had delivered about $11b a year in savings during its term.

“Without this disciplined approach, this year’s deficit would be $25 billion and debt would be on track to blow out to 59 percent of GDP,” she said.

Willis promised to release more details to prove that: “We have the receipts.”

Sign up for Ngā Pitopito Kōrero, a daily newsletter curated by our editors and delivered straight to your inbox every weekday.

– Published by EveningReport.nz and AsiaPacificReport.nz, see: MIL OSI in partnership with Radio New Zealand

Source: Radio New Zealand

• Return to budget surplus delayed a year until 2030
• Deficits forecast to be bigger because slow economic recovery
• Growth forecast below 1 pct this year rising to more than 3 pct in 2027
• Debt expect to peak later and higher
• Finance Minister Willis says further spending discipline needed

The government’s financial position is looking worse for longer with a delay in getting to surplus and bigger deficits, according to new Treasury forecasts.

The Half Year Economic and Fiscal Update (HYEFU) showed the expected deficit for the year to next June would be $13.9 billion, $1.8bn worse than forecast in May, with no surplus now forecast until 2029/30.

The downward revisions reflected a slower economy, lower tax take, higher debt costs, but steady expenses.

Finance Minister Nicola Willis said the government was continuing to repair the books and the revisions should not be over emphasised.

“It’s the path to surplus that counts.”

She said the government was looking for the economy to get “fresh air in its lungs” and recover strongly from 2027 onwards which would boost the tax take.

Willis said the government would run a tight financial regime, with the amount of money available for new spending next year to remain capped at $2.4b, but it was determined to get back to surplus a year earlier than Treasury’s forecasts.

The Treasury forecasts generally showed an economy hitting a peak of growth at 3.4 percent in 2027 before easing back to around 2.5 percent for the next three years, while inflation eases back to around 2 percent over the forecast period, with unemployment also easing below 5 percent.

Treasury said it was basing its forecasts on a pick up in housing, an increase in migration, and continued solid export trade, but saw risks to its forecasts in both directions.

The positive risks included the economic recovery being quicker and stronger than anticipated, while the downside risks were that the recovery was softer as consumers and businesses remained cautious.

Net debt was forecast to peak at 46.9 percent of GDP in 2028/29 before edging lower from 2030.

The Debt Management Office reduced the borrowing programme by $5bn over the next two years, but increased it by $8bn in total in 2027 and 2028.

Sign up for Ngā Pitopito Kōrero, a daily newsletter curated by our editors and delivered straight to your inbox every weekday.

– Published by EveningReport.nz and AsiaPacificReport.nz, see: MIL OSI in partnership with Radio New Zealand

Source: Radio New Zealand

New Zealand’s video game sector is growing rapidly while much of the global industry is stagnating, according to an international expert.

This year’s annual survey by the NZ Game Developer’s Association put the sector’s pre-tax income at $759 million, up 38 percent from the year before.

Kate Edwards, the executive director for the International Game Developer’s Association, told Nine to Noon that New Zealand’s growth was making waves internationally.

“You’ve got a nice ecosystem that is well supported by the government, you’ve got an education system that’s supplying talented people going into the games industry,” she said.

“As far as sustaining that level of growth, it’s possible. That’s one thing that I think makes New Zealand stand out right now is it’s seeing that growth in the face of an industry that has not seen growth, at least internally.”

She said a number of major game companies around the world had bitten off more than they could chew during the Covid-19 pandemic.

“During Covid-19 a lot of game companies ramped up, they hired a lot of people, because during Covid-19 we saw a huge boom in gameplay because people were stuck at home… A lot of people started playing games for the first time,” she explained.

“A lot of companies mistakenly thought this wasn’t going to end, so when things went back to normal a lot of companies had to downsize.”

New Zealand’s gaming industry was still young and the vast majority of studios would be considered “indie” or “double-A” compared to major international publishers like PlayStation, Microsoft and Nintendo as “triple-A” giants, Edwards said.

But she explained that “indie” and “double-A” studios were seeing the most growth and success in 2025.

“Let’s take some recent examples that have been very successful, Clair Obscur: Expedition 33 which swept The Game Awards just a few days ago. Clair Obscur made by about a 20 person team in France,” she said.

“Or even the year before, the game Balatro which just went crazy in terms of both popularity, sales, awards it got, that was made by one individual in Saskatchewan (in Canada) who still remains anonymous. So the scale of the studio is not really the [measure] of success.”

Christchurch-built indie game Dredge achieved massive success in 2023 despite being made by just four people.

Some games would have a relatively short life-cycle, with developers moving on to sequels or other projects, while others would persist for several years at a time, Edwards said.

“Certainly people like things new, [Clair Obscur and Balatro] are examples of games that are very new and very fresh… At the same time, a lot of companies have had tremendous success with the long tail of an IP that’s very popular,” she said.

“Look at some of the franchises like Call of Duty and Battlefield, games like that which have been going on for decades now.”

New Zealand-made online game Path of Exile was released in 2013 and had maintained a steady player-base for over ten years before its sequel, Path of Exile 2, released to even greater success last year.

Kate Edwards drew parallels with Finland’s game industry, which was experiencing similar success.

“I see a lot of similarities and parallels there, which is a really good thing because Finland has basically used their national identity as a driving force to say ‘Finnish game developers are the best in the world,’ well I think New Zealand developers are on par with that as well,” she said.

“If they want to lean into national identity as a cohesive force… Because I think that’s the key, among the creative sectors… There needs to be that sense of cohesion that we’re all in this together because ultimately we’re seeing trans-media and the crossover of all these properties, IP in games being turned into film and TV and vice versa, there’s so much room there to work together.”

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– Published by EveningReport.nz and AsiaPacificReport.nz, see: MIL OSI in partnership with Radio New Zealand

Source: Radio New Zealand

Consumer spending patterns have been tracking slightly below expectations for the first half of the month, but are expected to pick-up as Christmas approaches.

Worldline NZ’s latest data indicates spending at core retail merchants fell 0.3 percent to just over $2 billion ($2.049b) in the first 14 days of December on last year, with mixed patterns across sectors and regions.

Spending was highest in West Coast (+3.9 percent), Whanganui (+3.3 percent) and Otago (+2.9 percent), with the biggest declines recorded in Wellington (-4.0 percent) and Bay of Plenty (-2.4 percent).

Worldline NZ chief sales officer Bruce Proffit said Christmas Eve was expected to be the peak day for total core retail transactions.

“But we’ll see if that holds up in the ongoing challenging economic environment,” he said.

Hospitality spending was also expected to rise further this week with the peak expected Saturday 20 December.

“Food and liquor stores saw more transactions and slightly higher average transaction value across almost all regions in New Zealand, apart from Marlborough, but this is expected to increase even further in the coming days as shoppers prepare for Christmas Day festivities,” Proffit said.

Hospitality sector spending was mixed with spending generally more positive outside the major centres.

Spending on non-food goods fell 5.7 percent on the year earlier to just over half a billion dollars ($549m).

“Notably, some merchant sectors surpassed their Black Friday weekend spending peak last Saturday, including gift stores, toy and games retailers, bookshops, marine stores, florists and jewellery stores,” Proffit said.

“However, almost all merchants within this group are anticipated to reach new highs for the year, in the remaining days before Christmas, although spending at clothing stores generally peaks on 26 December amidst the usual Boxing Day sales.”

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– Published by EveningReport.nz and AsiaPacificReport.nz, see: MIL OSI in partnership with Radio New Zealand

Source: Radio New Zealand

Economists say the Reserve Bank governor is sending a clear message to financial markets they have gone too far in raising fixed mortgage rates over the past week.

Anna Breman, barely two weeks into the role, took the unusual step of issuing a statement about current financial conditions which had gone “beyond” the RBNZ’s recent projection for interest rates.

“Financial market conditions have tightened since the November decision, beyond what is implied by our central projection for the OCR.”

She repeated that the forward path for the official cash rate (OCR) published in the November Monetary Policy Statement (MPS) indicated a possibility of another rate cut in the near term.

“However, if economic conditions evolve as expected the OCR is likely to remain at its [ https://www.rnz.co.nz/news/business/580066/official-cash-rate-cut-to-2-point-25-percent

current level of 2.25 percent] for some time.”

“As always, we are closely monitoring wholesale market interest rates and their effect on households and businesses.”

Breman said the RBNZ would look at incoming data, financial conditions, and global developments, as it worked towards its next interest rate decision in February.

Independent economist Cameron Bagrie said banks were also looking at the numbers and were coming to the view that rates would rise next year.

“There’s a little bit of calm your farm, cool your jets.”

“Financial markets don’t tend to align themselves with what the Reserve Bank is saying 100 percent of the time, financial markets tend to push a little bit further in either direction.”

“They were a little bit south of the Reserve Bank when interest rates were going down now they’ve decided to go a little bit north of the Reserve Bank in regard that the next move looks like it’s going to be up.”

Bagrie said the same trend of second guessing and moving ahead of central banks was apparent in other economies around the world, including Canada and Australia.

He said it was a little bit of jawboning, but markets were anticipating a rate rise next year to counter any inflation pressures arising from a recovering economy.

BNZ senior strategist Jason Wong said wholesale interest rates had moved lower after Breman’s comments.

“The market took the view that Breman was sending a clear message of some discomfort with the post November MPS market reaction, which had seen rates sharply higher.”

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– Published by EveningReport.nz and AsiaPacificReport.nz, see: MIL OSI in partnership with Radio New Zealand