ANZ warns recovery will be slow grind as Reserve Bank readies hawkish shift

Wednesday, 18 February 2026

ANZ has warned the economic recovery and a return to “full employment” is more likely to be a marathon than a sprint, as the market braces for the Reserve Bank to set a more hawkish outlook for interest rates today.

The Reserve Bank is expected to leave the Official Cash Rate on hold at 2.25% when it releases its monetary policy statement at 2pm but signal that the OCR is likely to go up later this year.

ANZ said the big picture was of a recovery, but that the economic data hadn’t all been one-way traffic and inflation had proved stubborn.

“Put simply, the race to recovery and therefore full employment appears to have finally begun in earnest – but this will be a marathon, not a sprint.

“Given cost-of-living pressures are still very much front of mind for many households, and given the fact that recovery in the labour market will take time, households are likely to remain cautious,” it said.

ANZ is forecasting unemployment will drop slowly from its last recorded rate of 5.4%, to 4.9% by the end of this year and to 4.5% by the end of next year.