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.

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.

We are serious about journalism.

Already a Subscriber ? Sign in here.

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].name) | 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 }}