Weak economy sharpens debate on how deep the rate cut will be

Governor Christian Hawkesby has two more monetary policy decisions to go. (Image: NZME)

Tue, 30 Sep 2025

Markets are betting on a rate cut next week, and the only question is how deep it will be.The official cash rate (OCR) is at 3% and the debate is centred on whether the monetary policy committee votes to cut by 25 basis points on Oct 8 or by 50. In August, the monetary policy committee opted for a 25-basis-point cut by a four-to-two vote, with the two outliers pushing for a 50-basis-point cut.Since then, data has shown the economy contracted by 0.9% in the June quarter, far worse than the 0.3% forecast by the Reserve Bank of New Zealand (RBNZ),...

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