Reserve Bank of New Zealand raises OCR to 2.5% as Chief Economist Paul Conway warns inflation may peak at 4.3%, with more rate hikes possible in 2026.

The bank has raised floating rates for home and business loans by 25 basis points.

Reserve Bank of New Zealand raises OCR to 2.5% as Chief Economist Paul Conway warns inflation may peak at 4.3%, with more rate hikes possible in 2026.

New Reserve Bank research shows Kiwi firms have become more likely to increase prices during periods of high inflation and are less likely to cut them when costs fall.

Paul Conway is keeping tabs on inflation expectations and firms' price-setting behaviour.