The Reserve Bank has kept the official cash rate (OCR) at 5.5%, and pushed back strongly against a growing market perception that cuts could be to come before long.
It said, while higher interest rates were restricting spending and inflation was dropping, it was still too high, and the OCR will likely have to stay at current levels for some time.
If further inflationary pressure was seen, the bank said, the OCR could have to increase again.
Governor Adrian Orr faces a terrible dilemma, continue to punish mortgage holders or allow inflation to keep robbing everyone.
He has clearly popped any bubble by the market that the OCR would be coming down and in fact points to another possible hike and no cut until 2025!
The economy is in far worse shape than is being recognised and the new Government’s love affair with taking from the poor to give to Landlords will cause even larger costs…
The Government’s move to accelerate tax cuts for landlordsmeans a blowout of about a billion more dollars over four years, according to the Council of Trade Unions.
It could also mean landlords collecting a cheque from the Government, with no benefit to renters.
…the pain Orr is promising will only get more intense as the new Government lurches from one PR disaster to another.
The lack of being able to make any economic headway will force the Government to do stupid symbolic policy to sate their angry right wing electorate.
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