Bank economists starting to forecast rate hikes in 2026

BNZ expects the Official Cash Rate (OCR) to rise again to reach 4%. (Image: Alex Burton)

Fri, 17 Jan 2025

Some economists from the major banks are forecasting interest rates to increase as early as next year once the country's economic malaise improves.In their most recent forecasts, both Bank of New Zealand (BNZ) and Westpac predicted the Official Cash Rate (OCR) will fall from its current level of 4.25% this year and then begin to rise again in 2026.BNZ, which provides the largest forecast horizon, expects the OCR to fall to 2.75% before slowly rising back to 4% in May 2027.The Reserve Bank of New Zealand (RBNZ), by contrast, expects to conti...

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