BNZ Weekly Overview October 12

Welcome to the October 12 edition of the BNZ Weekly Overview.

This month we are running our monthly confidence survey. If time permits please click on the URL below and tick whether you believe the economy will get better or worse over the next 12 months. Of far more importance however please take a minute to let us know what is happening in your particular industry specifying what that industry is. The results will be released early next week.

http://www.closer.co.nz/bnzeconomist.asp

Over the past fortnight we have seen the New Zealand dollar end unchanged against the greenback but rise strongly on the cross rates as we have kept up with a rising US dollar lifted by strong labour market data. Locally the economic data have surprised on the strong side and with news yesterday that spare capacity in the economy is even less than thought and a rampant debate getting under way about the extent of tax cuts in 2008 the chances are strong the Reserve Bank may need to raise its cash rate on October 26 or December 7. But they will be cautious given the renewed weakness appearing in some parts of the export sector following the rise in the exchange rate.

Best regards

Tony Alexander
Chief Economist
Economics
Bank of New Zealand

ENDS

See... BNZ Weekly Overview Oct 12

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