OCR hike a sign the Reserve Bank sees the economic recovery strengthening, Willis says

Wednesday, 8 July 2026

The Reserve Bank hiked the official cash rate by 25 basis points to 2.5%, its first rise since May 2023. While Finance Minister Nicola Willis welcomed it as a sign of economic recovery, homeowners face immediate mortgage pressures.

What you need to know

All Reserve Bank Monetary Committee members agreed that increasing the OCR at upcoming meetings would likely be necessary to ensure higher near-term inflation does not feed through to higher medium-term inflation.

The Reserve Bank (RBNZ) has hiked the Official Cash Rate (OCR) from 2.25% to 2.5%.
Economists had broadly expected an increase after the RBNZ suggested in its May review it would do so.

Some argued an OCR hike was needed to get inflation, at 3.1%, back within the RBNZ’s 1-3% target band, while others said the higher inflation rate was transitory due to the Iran War supply shock, and putting more pressure on households to suppress demand wasn’t the right course.

Follow Stuff’s live coverage of the latest OCR update throughout the day.