22 Jul 2015

Weak economy justifies a cut - NZIER board

1:55 pm on 22 July 2015

The Institute of Economic Research's Shadow Board says a weaker economy justifies another cut in interest rates.

The nine-member panel was recommending the Reserve Bank reduce the Official Cash Rate from 3.25 percent to 3 percent tomorrow.

It noted that business and consumer confidence had fallen to the lowest level in three years, with the drop even more pronounced in struggling dairy regions.

Future inflation was also set to remain benign.

The Shadow Board does not think a stronger cut of half a percentage point, which would take the benchmark rate to 2.75 percent, was needed this week.

Get the new RNZ app

for ad-free news and current affairs