The Budget is expected to be another factor pushing interest rates higher. Infometrics managing director Gareth Kiernan says he expected the Budget to be fiscally neutral however it ended up being stimulatory because the initial cost of the tax cuts is greater than the revenue benefit of GST.
Because of this there is likely to be upward pressure on interest rates.
"It adds a little bit of upward pressure on interest rates."
However Infometrics won't be changing its forecasts as it was already "hawkish".
For more Budget stories check out our sites www.goodreturns.co.nz and www.landlords.co.nz.
There are no rate changes to advise today.
