A bigger rise in GDP than anyone expected for the first three months of the year.

GDP went up 1.6 per cent in the March quarter - following on from a one per cent contraction in December.

KiwiBank chief economist Jarrod Kerr says consumers and businesses spent more than anticipated.

"So there's a lot more confidence in the economy, and that points to a stronger labour market, it points to more wage growth, it just points to a much stronger economy than we thought."

Kerr says on the back of this, they are expecting the Official Cash Rate to rise in May next year.

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