OCR and Inflation

OCR is linked to inflation is linked to interest rates

Gerald Mullaney

26 July 2025

As of July the inflation rate increase from 2.50% to 2.70% with rising inflation in the short term cause the RBNZ to pause the July OCR cut so it can see what the trend in inflation is over the short term.

The 2.70% inflation rate is too high and close to the high end of the inflation band of 3.00%

Should the next reading be 2.70% or higher then dont expect an OCR cut.

If the inflation trend is down in the next announcement say 2.50% or less there is a good chance the OCR will be cut to 3.00%

Thinkr view still as July that the OCR will be cut to 2.50% or less the low occurring in the first quarter of 2026.

Thinkr previous was a low by May to Nov 2025 however the outlook forecast is the low occurring in the first quarter of 2026.

The reason for thinkr forecast is that 2026 is election year and the govt does not want the economy peaking to early, therefore Nov is the election date, therefore the govt will pump prime the economy from Feb March 2026 there abouts to peak the economy by NOV 2026.

In the meantime creative destruction will continue as the govt prepared for BOOM AHOY 2026.

From 2026 onwards NEW ZEALAND economy will be re structured to GET NZ WORK AGAIN and refocus people on producing goods and services.

The end is nigh for slothfulness get use to getting out of bed at 6am to produce goods and services and THE NEW ECONOMY 2026