18 Oct 2008

NZ First, National call for interest rate cuts

11:40 am on 18 October 2008

The National Party is supporting a call by New Zealand First for interest rate cuts, but Labour says it will not seek to influence the Reserve Bank.

New Zealand First has accused the bank of sitting on its hands while companies go under, and households struggle.

Its leader Winston Peters wants it to cut the Official Cash Rate from 7.5% to 6%, to prevent a deep economic slump.

National's leader John Key agrees and says he would be very surprised if the OCR is not cut when the banks review is announced next Thursday, 24 October.

Mr Key was recently criticised for calling for a cut, with the warning he should not try to influence the Reserve Bank Governor.

When asked if Mr Peters was in danger of doing that, Labour's leader Helen Clark said as a minor party leader, his opinion carries less weight than that of Mr Key.

Mr Peters says the Reserve Bank is sitting on its hands while companies collapse and jobs are lost.

He says other countries are slashing interest rates and doing everything they can to stay afloat, and the bank needs to take action.

Mr Peters' call follows one from Mr Key two weeks ago for the Reserve Bank to act early on interest rates.