In a massive blow to homeowners, out-of-control inflation has pushed the Reserve Bank into once again hiking the Official Cash Rate by a dramatic 50 basis points, National’s Finance Spokesperson Nicola Willis says.
“Today’s statement is yet more bad news for New Zealanders, confirming inflation is set to stay higher for longer, growth will be lower and interest rates will have to be hiked even higher to bring things under control.
“The cost of living crisis is hitting everyone across the country and it’s not going away anytime soon. Runaway prices are crushing household budgets. Rapidly rising interest rates are crushing mortgage-holders. Today’s statement confirms both these things are set to persist for many months ahead.
“Concerningly, today’s forecasts from the Reserve Bank suggest inflation now won’t return below 3 per cent until the middle of 2024 and won’t get back to its target midpoint until 2025.
“Instead of throwing up their hands and blaming international factors, the Government needs to take action to bring inflation under control. Broken immigration settings and runaway spending are choking off supply while overheating demand – a recipe for more inflation.
“The Reserve Bank acknowledged ‘labour shortages are a major constraint on business activity’, but the Government is still failing to fix our broken immigration settings. Businesses and consumers will continue to be squeezed by widespread skills shortages until that changes.
“The Government should adopt National’s five point plan to fight inflation – return the Reserve Bank to a single focus on price stability, reduce costs on businesses, remove bottlenecks in the economy, rein in government spending, and prioritise tax relief for workers.”