Shadow Board is divided over whether the RBNZ should hike by 50bp

The Shadow Board is sharply divided over how much the Reserve Bank should increase the Official Cash Rate (OCR) at the April meeting, with views split over whether the OCR should increase by 25 or 50 basis points. The surge in inflation pressures has led to growing calls for the Reserve Bank to undertake monetary policy tightening at a more aggressive pace to rein in these inflation pressures. While supply-side constraints are driving much of the increase in inflation in the New Zealand economy, the recent rise in longer-term inflation expectations raises the risk of a wage-price spiral developing.