OCR Hike Criticized as Job Market Woes Deepen

The New Zealand Council of Trade Unions (NZCTU) has criticized the Reserve Bank's decision to increase the Official Cash Rate (OCR) to 2.75 percent, calling it a mistake that will worsen an already weak job market.

NZCTU President Sandra Grey said the OCR hike will push unemployment higher, making life harder for the 171,000 New Zealanders who are currently out of work. This is the highest number of unemployed since the early 1990s.

The Reserve Bank's decision repeats a mistake made in the past when it kept the OCR too high for too long, contributing to a prolonged economic downturn. Unemployment, underutilization, and Jobseeker numbers have all increased sharply over the past three years.

Grey warned that unemployment can have lifelong financial consequences, including lower lifetime earnings and mental and physical health problems. She also stated that a higher OCR will make the much-needed economic recovery harder.