The SME Stream

The Reserve Bank has raised the Official Cash Rate 25 basis points, from 2.5 percent to 2.75.

The Monetary Policy Committee agreed unanimously to the rise, broadly expected by economists and the market.

Newstalk ZB senior political correspondent Barry Soper says this could have an immediate impact on retailers, as people will now have less money to spend in stores. 

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The Finance Minister says major gas user Methanex shutting up shop doesn't change the Government's argument for a Liquified Natural Gas terminal. 

The methanol producer is closing its Taranaki plant after more than 30 years. 

It cites the continued decline in domestic natural gas and no clear pathway to meaningful new supply. 

Nicola Willis told Mike Hosking they'd already predicted Methanex would close and had factored this into their LNG plans. 

She says they decided the gas Methanex uses being released back into the market wouldn't be enough to solve our problems, believing another option is still needed. 

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An industry group for chartered accountants is putting a novel idea on the table to lower the cost of New Zealand Superannuation to the Crown, while keeping it universal.

Chartered Accountants Australia New Zealand is advocating for the next Government to allow people to delay the age at which they start receiving Super.

According to NZIER modelling, this approach could reduce the annual cost of Super to the Crown by billions of dollars every year, depending on how the system was designed.

NZ Herald Wellington business editor Jenee Tibshraeny explained further.

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More Official Cash Rate hikes are possible, but far from guaranteed.

The Reserve Bank has raised the cash rate 25-basis-points this afternoon to 2.75 percent.

Governor Anna Breman says they are moving it towards a neutral level, to around 3 percent.

But she says nothing is set in stone.

"Today's decision will allow us to assess the impact of these two OCR increases - and then we will see whether we need to do further increases." 

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The Reserve Bank has raised the OCR by 25 basis points to 2.75 percent, in line with economists' expectations. 

Markets expected the cash rate would go up, but many had priced in a bigger increase - and there's still an expectation that the OCR could go up further down the track.

Milford Asset Management's Remy Wisenberg explained further.

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New Zealand’s economic data is finally showing some signs of life – but for many businesses and households, it certainly doesn’t feel like a recovery.

Nearly 3,000 hospitality businesses ceased trading in the past year, liquidations remain elevated, and unemployment is likely to take longer to turn around. At the same time, confidence is improving and economists are increasingly optimistic about what comes next.

Liam Dann and Tamsyn Parker look at the conflicting signals in the economy, why the recovery may take time to reach ordinary New Zealanders, and what NZ’s march towards $1 trillion in total debt really tells us.

The Economy of Everything is brought to you by CMC Markets.

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New Zealand’s debt burden has nearly doubled in 10 years. 

But, there are signs the country’s borrowing habits are becoming more sustainable. 

New Zealand businesses have boosted their borrowings by more than $6 billion in the last year to $143b, which is a potential sign of rising confidence in the economy. 

So, is debt really as bad as we think – or are the numbers telling a more nuanced story about households, businesses, and the government? 

Today on The Front Page, NZ Herald business editor-at-large Liam Dann is with us to examine the numbers behind the nation’s march towards $1 trillion in debt.

Follow The Front Page on iHeartRadio, Apple Podcasts, Spotify or wherever you get your podcasts.

You can read more about this and other stories in the New Zealand Herald, online at nzherald.co.nz, or tune in to news bulletins across the NZME network.

Host: Chelsea Daniels
Editor/Producer: Richard Martin
Producer: Jane Yee

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Christina Leung on why the NZIER Shadow Board sees rates rising further, and the balancing act between inflation control and a weak economy.

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herald Senior Correspondent Katie Bradford asks if businesses will be compensated as Auckland’s costly level-crossing removals bring years of disruption.

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What were the standouts from the quarter? Roger Garrett from Craigs Investment Partners.

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