The NZ Monetary Policy Committee today increased the Official Cash Rate (OCR) from 3.5 percent to 4.25 percent. Core consumer price inflation is too high, employment is beyond its maximum sustainable level, and near-term inflation expectations have risen.
Demand in the New Zealand economy has remained resilient. Worker shortages are holding the economy back and increasing inflation. Global developments are adding to inflation in New Zealand but weakening our economic growth outlook. Higher interest rates are needed to meet our inflation and employment objectives
So, The Committee agreed that the OCR needs to reach a higher level, and sooner than previously indicated, to ensure inflation returns to within its target range over the medium term.
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