New Zealand Economic Perspectives "Does the RBNZ still need to hike in July?" Wu

Research evidence excerpt

New Zealand Economic Perspectives "Does the RBNZ still need to hike in July?" Wu

Global Research

23 June 2026ab

New Zealand Economic Perspectives Economics

New ZealandDoes the RBNZ still need to hike in July?

Stephen Wu

Economist

stephen.wu@ubs.com

+61-2-9324 2283

George Tharenou

The case for early and pre-emptive hikes is that inflation is too high, and Economist

hence monetary stimulus needs to be removed. george.tharenou@ubs.com

+61-2-9324 3520

Recently, oil prices have fallen sharply, and the likely peak in CPI inflation has

come down. The RBNZ could choose to wait before responding to high Izzy Lowe

inflation, given significant spare capacity. Associate Economist

izzy.lowe@ubs.com

UBS continues to expect the RBNZ MPC to hike in July, and the vote could +61-2-9324 2651

shift towards unanimous. Tatiana Bodrova

Associate Economist

We expect the MPC members who voted for a hike in May to do so again in

tatiana.bodrova@ubs.com

July, as lower fuel prices could give rise to stronger aggregate demand, while +61-29-324 2645

inflation is already too high. Other MPC members are also likely to shift

towards tightening: policy is still accommodative, the Sep-26 meeting is not

for another two months, and such a long gap heightens the risk of inflation

expectations becoming de-anchored.

May MPS was a hawkish hold, given 3-3 vote & raised OCR track

The RBNZ's May-26 MPS meeting delivered a hawkish hold, with a 3-3 split vote and an

OCR track that signalled imminent hikes towards 3¼%. All RBNZ MPC members agreed

hiking the OCR at upcoming meetings is 'likely to be necessary to ensure higher near-

term inflation does not feed through to higher medium-term inflation'.

Global oil prices have fallen sharply, so inflation risks are subsiding...