Views on the OCR's endpoint span 75 basis points across the major banks
Following last week's quarter-point hike to 2.75%, New Zealand's major bank economists are largely aligned on the next few months of the tightening cycle — but a genuine spread has opened up over where it all ends, with peak OCR forecasts across ANZ, ASB, BNZ, and Westpac ranging from 3% to 3.75%.
Near-term consensus, one meeting still in dispute
The RBNZ's own updated projections point to an OCR nudging toward 3% by December, and most bank economists are sitting close to that. The only real disagreement is timing: BNZ has pencilled in a pause in October followed by a hike in December, noting that overnight swap pricing implies "around 7bp of tightening by October and close to 25bp cumulatively by December" — broadly in line with the bank's own modelled track.
ANZ is holding to an October move instead, albeit describing it as "a lower-conviction call than previously" given the committee's signal that it can "afford to take a little time to observe how things play out." Westpac's own base case matches BNZ's sequencing, expecting the RBNZ "will pause in October before delivering another 25bp hike in December." ASB expects two more 25bp hikes this year, taking the OCR to 3.25% by year-end.
Kiwibank's take was the most dovish in tone. While acknowledging the hike was expected, the bank's economists said they "would have preferred them to hold," adding they were "happy that they are looking at the future through a more dovish lens" — a reference to the RBNZ's own language, which the bank's record of meeting described as dependent on "the committee's judgement of the balance of risks to medium-term inflation."
Where the forecasts genuinely split
Beyond December, the picture fragments further. ANZ's own OCR forecast is the most dovish of the group, holding flat at 3% out to December 2027 — notably below the RBNZ's own implied endpoint of around 3.28%, which ANZ's commentary describes but does not adopt as its house view. ASB's peak sits at 3.25%, close to the RBNZ's own track.
BNZ, by contrast, has trimmed its OCR peak forecast to 3.75%, reached by May 2027 — the highest of the group. BNZ's own economists concede this higher peak sits alongside a lower-conviction near-term view, noting "the balance of risks around our short-end forecasts is skewed lower" given ongoing spare capacity in the economy.
Westpac continues to expect "further increases in the OCR to 4% by September 2027," a forecast the bank stresses could still shift depending on how the data lands.
Construction and GDP add near-term uncertainty
Both ANZ and BNZ flagged the same standout data point: building work volumes rose 4.8% in the June quarter, far outstripping ANZ's forecast of just 0.5% growth, with both residential and non-residential activity contributing. ANZ said the result presents "clear upside risk" to its Q2 GDP forecast of -0.2% quarter-on-quarter, while BNZ called it "a strong signal that construction activity will make a sizable positive contribution to Q2 growth" after nine consecutive quarters of annual decline in the sector. Q2 GDP data, due 17 September, will be a key input into the RBNZ's next review on 28 October, alongside the Quarterly Survey of Business Opinion and Q3 CPI.
What it means for borrowers
For advisers, the spread across peak forecasts — rather than the near-term timing dispute — is the more useful signal for client conversations. Westpac notes that fixed terms between two and five years now sit above 5%, and if the RBNZ's tightening cycle ultimately runs closer to BNZ's or Westpac's higher endpoints than ANZ's more moderate call, borrowers who lock in longer fixed terms now may be better insulated against further increases down the track.
For more insights, read the reports from ASB, Westpac, ANZ, BNZ, and Kiwibank.
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