RBNZ Rate Hike Sparks Criticism Over Impact on Young Jobseekers

The Reserve Bank of New Zealand (RBNZ) raised its Official Cash Rate (OCR) by 25 basis points to 2.75% yesterday, a decision that has been met with criticism from some quarters.

The hike was expected by financial markets and most economists, but Bernard Hickey, in his column 'The Kākā', argues that it is unfair, unnecessary, and counterproductive.

Hickey points out that the RBNZ's decision will deepen the scars on a generation of young people who are already struggling to find employment. Over 93,000 teenagers are either out of work or need more hours of work, while nearly 4,000 fully unemployed and/or too-sick-to-work 18-19-year-olds are about to have their benefits taken away.

Hickey argues that the Reserve Bank's reliance on monetary policy to control inflation is flawed. He believes that instead of supporting investment, jobs growth, and wage growth, the RBNZ has sent a signal to consumers and businesses to invest and spend less.