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...

Subscribe to BusinessDesk

Stay informed on business, government and financial developments across New Zealand.

Stay informed on business, government and financial developments across New Zealand.
Deeply researched, twice-edited and fact-checked news
Annual subscribers also receive a complimentary subscription to The Wall Street Journal
Personalised email news alerts, plus gift up to 5 stories a month to non-subscribers

You can cancel anytime with two clicks, an email or a phone call.
Find out more.

We are serious about journalism.

Name {{ registerForm.errors.get('name') }}

Email address {{ registerForm.errors.get('email') }}

Phone Number {{ registerForm.errors.get('phone') }}

Job Title {{ registerForm.errors.get('title') }}

Password Minimum password length of 8 characters.
Require at least one upper and lowercase, numeric, and special character. {{ registerForm.errors.get('password') }}

Repeat password {{ registerForm.errors.get('password_confirmation') }}

We had trouble validating your card. It's possible your card provider is preventing us from charging the card. Please contact your card provider or customer support.

Credit Card

Cardholder's name

{{ __(plans[index].interval) | capitalize }} {{ plans[index].attributes.old_price | currency }} {{ plans[index].price | currency }}

All subscriptions auto renew but are easy to cancel.

I Accept The Terms Of Service

{{ registerForm.errors.get('terms') }}

Tax: {{ taxAmount(selectedPlan) | currency }}

Total Price Including Tax: {{ priceWithTax(selectedPlan) | currency }} {{ selectedPlan.type == 'user' && spark.chargesUsersPerSeat ? '/ '+ spark.seatName : '' }} {{ selectedPlan.type == 'user' && spark.chargesUsersPerTeam ? '/ '+ __('teams.team') : '' }} / {{ __(selectedPlan.interval) | capitalize }}

Primary Sector

Fed Farmers has 'no proof' of collusion, ANZ says

Federated Farmers has called on NZ banks to pull out of the Net Zero Banking Alliance.

Greg Hurrell 5:00am

Technology

The ‘humble’ NZ tourism tech company making millions

Tourplan was founded in 1986 and may be looking to sell for $150 million.

Ben Moore 5:00am

The ‘humble’ NZ tourism tech company making millions

Technology

French generative AI underdog taking on US giants

The new investments brought Mistral's valuation to almost €6b.

AFP 5:00am

French generative AI underdog taking on US giants

Sponsored

Why Kiwis are embracing Bitcoin ETFs

The once hard-to-access investment option is becoming mainstream.

Smart

Sponsored

The AI tech revolutionising safety in high-risk NZ workplaces

Around forklifts and machinery, Viewtech detects danger instantly.

Viewtech

More Economy

Economy

Westpac records soft December retail spending

Despite a slight lift, Westpac data points to a soft end of year for household spending.Westpac’s retail tracker, released on Thursday, showed spending on Westpac-issued credit and debit cards was up 2% in December compared to last year. Westpac senior economist Satish Ranchhod...

Staff reporters 16 Jan 2025