New Zealand Economic Comment "RBNZ preview: +25bp hike in July to 2.50%...."

Research evidence excerpt

New Zealand Economic Comment "RBNZ preview: +25bp hike in July to 2.50%...."

Global Research

2 July 2026ab

New Zealand Economic Comment Economics

New ZealandRBNZ preview: +25bp hike in July to 2.50%.

Household income & savings rate rise in Q1-26. Stephen Wu

Economist

stephen.wu@ubs.com

+61-2-9324 2283

George Tharenou

UBS still expect the RBNZ to hike the OCR by 25bps to 2.50% in July. Economist

george.tharenou@ubs.com

The RBNZ MPC is expected to view a hike in July as best balancing the risks

+61-2-9324 3520

around an unusually uncertain outlook, given policy is still accommodative

and inflation has been too high. Izzy Lowe

Associate Economist

Households remained cautious in Q1-26, as incomes rose 4.6% y/y and the izzy.lowe@ubs.com

savings rate lifted to 3.3%, the highest since the pandemic. +61-2-9324 2651

Tatiana Bodrova

Jul-26 RBNZ preview: +25bp to take the OCR to 2.50% Associate Economist

Sharply falling global oil prices, amid a still weak labour market, and a negative output tatiana.bodrova@ubs.com

gap could argue for caution from the RBNZ at their July MPR meeting. Last week, against +61-29-324 2645

this backdrop, we wrote about whether the RBNZ still needed to hike in July. We argued

that CPI has been too high, and hence inflation expectations still risk becoming

unanchored. While falling fuel prices reduce the near-term peak in inflation, it also

lowers downside risks to activity and the labour market. It could boost demand and

confidence ahead as household disposable incomes increase (something which was

noted at the May meeting); stronger economic conditions may increase the extent and

persistence of inflation. Put another way, a lower peak in headline CPI now could come

at the expense of higher core inflation later. With monetary policy still in an