Economist predicts what will happen next with inflation

Author
Newstalk ZB,
Publish Date
Tue, 25 May 2021, 3:55PM
(Photo / File)
(Photo / File)

Economist predicts what will happen next with inflation

Author
Newstalk ZB,
Publish Date
Tue, 25 May 2021, 3:55PM

The Reserve Bank tomorrow will unveil it's second full Monetary Policy Statement of the year.

While the focus is usually on the Official Cash Rate, many are wondering what the Bank will signal around inflation and interest rates.

Writing in the New Zealand Herald, business editor-at-large Liam Dann said that "the biggest bet in global economics right now is on whether post-Covid inflation will prove to be a short-term blip or a more persistent structural problem".

"Financial markets are already on edge and the debate is shaping up as one of the most divisive in a generation."

Independent economist Tony Alexander told Simon Barnett and Phil Gifford that they won't increase tomorrow, and it likely won't happen until the middle or end of 2022.

"Initially, I think they will go relatively slowly as we haven't had a period of sustained interest rate increases in New Zealand since 2004 to 2008, so it's going to be quite experimental it starts getting going."

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