New Zealand Cash Rate Remains Steady at 2.25% as Inflation Expected to Dip

The Reserve Bank's Monetary Policy Committee decided to keep the Official Cash Rate (OCR) at 2.25%, citing a slow but steady recovery in the economy. According to the latest data, annual consumer price inflation was slightly above the target range at the end of 2025, led by increases in food, electricity, and local council rates. The economy is showing signs of recovery, with strength in commodity prices and the agricultural sector. The labour market is stabilising, but unemployment is still high, and house price growth is weak. The MPC is confident that inflation will fall to the 2% midpoint over the next 12 months, thanks to spare capacity in the economy, modest wage growth, and core inflation within the target band.