There's no easy way down for New Zealand's economy, as high inflation poses a persistent problem.

Westpac's latest economic overview predicts the Official Cash Rate will rise further and peak at five percent next year.

Its acting chief economist says despite hikes this year, monetary policy takes time to have a full effect on the economy.

Michael Gordon says many borrowers will be rolling on to higher interest rates in the next six to 12 months.

He says some rates might be three percent higher - which will have an impact on household budgets and spending.

Gordon says it’s more likely the bank would be forecasting an outright recession,  were it not for the recovery in international tourism.

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There's no easy way down for New Zealand's economy, as high inflation poses a persistent problem.
Westpac's latest economic overview predicts the Official Cash Rate will rise further and peak at five percent next year.
Its acting chief economist says despite hikes this year, monetary policy takes time to have a full effect on the economy.
Michael Gordon says many borrowers will be rolling on to higher interest rates in the next six to 12 months.
He says some rates might be three percent higher - which will have an impact on household budgets and spending.
Gordon says it’s more likely the bank would be forecasting an outright recession,  were it not for the recovery in international tourism.
LISTEN ABOVE

Best of Business is the home of all things business at Newstalk ZB, from morning market updates right through to incisive interviews with New Zealand’s top business leaders and decision makers. 

Whether you’re a small business owner or interested in what’s going on in the Big End of Town, this podcast encompasses the sharpest voices and minds in the world of business.

Best of Business is the home of all things business at Newstalk ZB, from morning market updates right through to incisive interviews with New Zealand’s top business leaders and decision makers. Whether you’re a small business owner or interested in what’s going on in the Big End of Town, this podcast encompasses the sharpest voices and minds in the world of business.

Best of Business is the home of all things business at Newstalk ZB, from morning market updates right through to incisive interviews with New Zealand’s top business leaders and decision makers.