A higher increase will lead to a new 50bp OCR increase

Confusion assumptions in expansion predictions; but many have agreed to up to 50 OCR sources in the future.

Friday, April 22nd 2022, 12:36 PM

and Eric Frykberg

The cost of filling a store trolley will rise rapidly for the rest of the year, according to most economists.

They just resist the height of change.

Their comments are about Stats NZ releasing its March price growth rate of 1.8%.

It represents the annual growth of the Consumers Price Index (CPI) at 6.9%, the highest figure in 30 years.

While there are short -term forecasts of more than 7%, it is more than double the Reserve Bank’s expected upper limit, and adds a chord of opposition to the price of the stock. life is increasing for many families.

However, Westpac investors are seeing a glimmer of darkness.

“Inflation will be raised for some time,” they wrote.

“However, the quarter of March saw the highest rate of growth so far.”

They argued that some prices, such as doubling the price of crude oil, were turned into product prices.

And while prices rose sharply in the quarter, such as food at 3.1% and construction at 3.5%, others such as manufacturers rose slightly.

However, this small leg of consolation is not enough to change their forecast for a 50bp increase in OCR in May.

And the chief economist at Infometrics, Brad Olsen, doesn’t give Westpac a glimmer of hope.

He expects more money to rise in the future, perhaps more so than yesterday but because of the national wave of the wand.

“Part of the reason for yesterday’s count was not seven-the Government lowered that number by borrowing $ 350 million a quarter for fuel tax breaks,” he said. and Olsen.

“The worry is if the Government does (remove that tax) then you can see the increase.”

And when Olsen got some information from the horse’s mouth, it wasn’t good news.

“The conversations we’re having with the industry show there are a lot of ups and downs to come.”

More importantly, Olsen added, he did not expect to see an immediate increase.

However, the Reserve Bank’s firm action could ease this pressure, and it predicts a 50bps increase in OCR in May.

ASB also predicts an additional 50 jumps in OCR.

He said inflation would fall below its current 6.9%, but would remain above 5% for the whole year.

Mark Smith, the bank’s chief economist, found that CPI growth was slightly lower than forecast, and he lent at a lower rate than at a higher inflation rate. to be purchased for that purpose.

“But this will change places in the future when New Zealand opens,” he said.

Smith said rising stock prices and the inability to sell were ten -year highs and showed the extent of inflationary inflation.

“The multifaceted causes of price rise continue to be the result of high inflationary pressures indicating persistence,” Smith said.

Words: OCR

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A higher increase will lead to a new 50bp OCR increase

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