We cooled our jets. So where's our rate cut?

The Kākā by Bernard Hickey

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We cooled our jets. So where's our rate cut?

GDP falls 0.3% in Q3, renewing talk RBNZ can cut OCR from early next year; Wholesale rates down 100 bps since Oct, begging questions on when banks will pass on as lower fixed mortgage rates

Bernard Hickey

Dec 14, 2023

Transcript

Despite high population growth, the latest GDP figures are worse than many economists, and the RBNZ, were expecting, as consumers deal with higher mortgage costs. Photo: Lynn Grieveson / The Kākā

TL;DR: Aotearoa-NZ’s economy contracted unexpectedly in the September quarter, unleashing further falls in wholesale mortgage rates that mean banks could (should?) start cutting fixed mortgage rates before Christmas. (See more in updated charts of the day below)

Elsewhere in the news this morning:

The new Government’s decision to scrap the Clean Car Discount discount scheme it calls the ‘ute tax’ is likely to cost the nation up to $900 million in extra fuel import costs and the Government up to $680 million in extra carbon credit costs because the decision is expected to reduce electric car numbers by up to 350,000 and increase emissions by up to 3 million tonnes; Drive Electric
MSD is finally prosecuting larger numbers of Covid wage subsidy fraud after years of complaints it has pursued beneficiaries much more aggressively than businesses that fraudulently and needlessly claimed and retained hundreds of millions of dollars; 1News Katie Bradford
Claims of treaty breaches are being lodged with the Waitangi Tribunal over the new Government’s moves to dismantle Te Aka Whai Ora and repeal smoke-free rules; 1News, 1News
First Union, 350 Aotearoa and the Council of Trade Unions published research yesterday showing for every dollar the four gentailers invest in new renewable capacity, $2.41 is paid out to shareholders in dividends.

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