OCR hike all but certain, all eyes on the Reserve Bank's next move
Economists expect the Reserve Bank of New Zealand to raise the Official Cash Rate (OCR) again to combat inflation, despite concerns that the economy may be too weak to handle further tightening. The decision is a key indicator for mortgage rates and broader economic cooling.
Why it matters
Interest rate hikes directly impact household disposable income and business investment, serving as a primary lever for central banks to manage economic stability.
The Reserve Bank is all but certain to hike the Official Cash Rate again this afternoon, economists say, even as one major bank breaks ranks to warn the economy is too soft to take it. The decision, due at 2pm alongside the bank's September Monetary Policy Statement, will follow a hike <a href="https://www.1news.co.nz/2026/07/08/ocr-live-updates-rates-hiked-or-held-in-todays-nail-biter-call/">delivered in July</a> and is expected to take the cash rate to its highest in over a year. The <a href="https://www.1news.co.nz/2022/11/24/what-is-the-ocr-and-how-does-it-affect-our-lives/">Official Cash Rate</a> is the Reserve Bank's main tool for controlling inflation, and it filters down to households through the rates <a href="https://www.1news.co.nz/2026/09/01/kiwis-say-higher-interest-rates-a-matter-of-when-not-if-survey/">banks charge on mortgages and loans</a>. By lifting it, the bank makes borrowing more expensive, which is designed to cool spending and ease price pressures - but it also means higher repayments for households rolling onto new mortgage rates, and better returns for savers. It is reviewed eight times a year.
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