Annual inflation stood at just 1.1 percent according to data released by Stats NZ on Wednesday, but economists predict that number will rise as tightness in the Labour market fuels wage increases. Thomas Coughlan reports.
The IMF suggests the Reserve Bank adopt a debt-to-income limit to reduce the risks from a still-heavily indebted household sector. Thomas Coughlan reports.
Back by popular demand, here's the 8 things that mattered in our political economy in the (short) week that was, along with Weekend Reads at bottom.
In this morning's email we looked at how, and why, Labour is keen not to scare the business horses.
After almost 30 years the Reserve Bank of New Zealand has abandoned its pioneering approach of focusing solely on inflation. It will now aim to both keep inflation low and maximise employment, although it's not clear yet whether it's more than just window-dressing. Thomas Coughlan reports.
Reserve Bank Governor-designate Adrian Orr and Finance Minister Grant Robertson said there would be no change to the Bank’s two percent mid-point target for inflation when they signed the Reserve Bank’s new Policy Targets Agreement at the Beehive on Monday, but they did include a new aim of supporting maximum levels of sustainable employment.
Employers used immigration of cheap workers to keep growing at the end of 2017, putting off the tough decisions and investment needed to boost productivity and real wages. Thomas Coughlan reports.
In today's email we find a landmine for the incoming Reserve Bank governor to defuse.
The Reserve Bank faced questions from a Government MP today about why it couldn't cut interest rates to drive unemployment even lower. It argued in response further rate cuts could inflate the housing market again and it preferred interest rate stability to taking a risk that inflation could reappear.
The Acting Governor of the Reserve Bank, Grant Spencer, has warned households to prepare themselves for higher interest rates in the future.