Briefly in the news from Aotearoa’s political economy around housing, poverty and climate on Thursday, December 11:
New Reserve Bank Governor Anna Breman yesterday gave her tacit approval for a 50 basis point rise in wholesale interest rates going into Christmas.
The rise in wholesale ‘swap’ rates in the last month came after the previous Reserve Bank Governor signalled both the end of rate cuts, and an acceptance of the immediate financial market reaction to price in rate hikes next year.
Breman’s nonplussed response to being asked about the rise in wholesale rates has cemented in the rise, just ahead of the key pre-Christmas shopping season.
This led to Westpac announcing on Monday that it would increase its two-to-five-year mortgage rates by 30 basis points, which was the key topic of discussion yesterday in Parliament.
Asked about the Westpac rate hikes, Finance Minister Nicola Willis said borrowers should shop around.
The headlines about higher interest rates are awkward for the Government, coming just as the latest Taxpayers Union-Curia poll shows voter concern about cost of living rose sharply in the last month to its highest level in 18 months.
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Breman tacitly approves higher mortgage rates
Sometimes doing nothing and saying nothing has the same effect as taking an action, as we saw yesterday with the net results of new Reserve Bank Governor Anna Breman’s first comments to the media.
She gave a breakfast briefing for economic and political journalists in Wellington yesterday that I attended. She gave her best impression of the most conservative of opening batters in answer to the questions about the economy and interest rates.
But one question in particular forced her to reveal her approach, more through the lack of a direct comment, rather than any great flourish.
