Reserve Bank Raises OCR Ahead of Election

The Reserve Bank of New Zealand has raised the Official Cash Rate by 0.25% to 2.75%, a move that is being seen as an economic weapon for Labour ahead of the election campaign.

Although the rate increase is small, it comes at a time when unemployment in New Zealand is at record levels and shows little sign of improvement.

The Bank's Governor, Anna Breman, acknowledged the uncertainty surrounding future OCR increases, saying 'we do think that it is likely there may be a future OCR increase, but the timing is highly uncertain.'

Labour and the CTU have been quick to respond, with Labour's Finance spokesperson Barbara Edmonds attacking the Government for its overall economic management and the CTU's President Sandra Grey opposing the Bank's decision.