Westpac NZ Weekly Economic Commentary: It won’t happen overnight

We have revised our forecast for the Official Cash Rate higher. We now expect a 75 basis point rise in February, and a further 50 basis point rise in April (previously we had expected increases of 50bp and 25bp respectively at those meetings). Those increases would take the OCR to a peak of 5.50% – its highest level since 2008. Behind that change in our OCR forecast has been ongoing strength in inflation, and a related hawkish lurch from the RBNZ. The central bank delivered a 75 basis point rise in the Official Cash Rate at its November policy meeting. That was the largest ever increase in a single meeting,