| About Us | Advertise | Contact Us | Terms & Conditions | RSS Feeds | Other Sites: landlords.co.nz |
|
|
Join our newsletter
Mortgage Rates Newsletter |
|
|
Expert's Views
The economy's getting its breath backLast week's unemployment figures were disappointing and even led some commentators to suggest the Official Cash Rate (OCR) might move downward, however bank economists do not believe that will be the case.Monday, February 7th 2011, 5:03PMBNZ Markets Outlook illustrates the situation saying it is like watching a jogger walking lampposts to get their breath back (having sprinted too much in earlier laps), not one about to collapse in a heap on the footpath. "All that the recent data has made us unsure about is the point at which the jogger feels comfortable enough to resume, well, jogging." BNZ says it still believes the economy is making good underlying progress, that GDP growth will strengthen this year and that inflation will become more of a niggle sooner than many appreciate, thus forcing the Reserve Bank to resume nudging the cash rate higher. ANZ Market Focus also responds to calls to cut the OCR saying while no-one can debate the weakness we are seeing across core pockets of the economy, a fair portion is structural as the New Zealand economy returns to a more balanced growth path. "It's not the Reserve Bank's job to give a cyclical lifeline to sectors undergoing structural change, as the household sector rebuilds its savings buffer. "Indeed it would be somewhat ironic if, after reiterating the need to save more and spend less, the Reserve Bank dished out a cut to the OCR." ANZ says it thinks the economy is entering an inflection point where the hangover of weak 2010 data is still to be worked through but prospects for 2011 look better. ASB Economic Weekly says the lack of traction at present simply reinforces the need to keep interest rates low for the foreseeable future. ASB sees the risks to its view being an even later start. ASB also puts around a 10% chance on that the Reserve Bank cuts rates this year, though that is an event that would be preceded by clear signs that the economy, particularly the interest rate sensitive parts, are heading down over 2011 rather than re-gathering from last years softness. Comments from our readersOn 8 February 2011 at 8:05 am interested observer said:
Interesting that the BANK economists do not see rates coming down .. why would their leaders want them to when they can enjoy margins of over 3% on floating/short term rates compared to the OCR.
Once again the borrowers seem to continue to pay for poor lending decisions of the past by the banks who still took their bonus payments regardless
On 8 February 2011 at 11:22 am Terry Raggett said:
The Emperor has no clothes. We have never been this way before and wow, lets talk those margins up boys. It's really all about vested interest, especially in terms of bonus payments and over riders to "stake holders". Be prepared for a very very nasty landing. Add your comment: |
Latest News
|
Compare Mortgage Rates
Find a Mortgage Broker
Latest Trends
Future interest rate hikes softened
The Reserve Bank has kept the OCR at 2.50% as expected, but had lowered its forecast track for the 90 day bill rate by around 60 basis points (0.6%) to a peak of 4.30% by the end of next year. For borrowers that means floating home loans are not forecast to rise as much as previously forecast. In June the expectation was that the rates would rise 2% in the next 12 months: that figure has now been wound back to 1.4%. MORE » |
Disclaimer: Every possible effort has been made to keep the information in the rates tables as accurate as possible, however, neither the publishers of Mortgage Rates nor anyone engaged to compile these tables accept any liability for inaccuracies or any loss suffered as a result. It is strongly advised that readers check loan details directly with the provider concerned.
© Copyright 2012 Tarawera Publishing Limited. All Rights Reserved.
