OCR held at 2.25% as Reserve Bank signals higher rates ahead

The Reserve Bank kept the Official Cash Rate on hold at 2.25%, although the decision was narrowly split, with Governor Anna Breman casting the deciding vote.

The Bank warned interest rate increases are likely to come sooner and be larger than previously forecast, with some economists predicting rises could begin as early as July. Property economist Kelvin Davidson said flat prices, soft sales activity and high listing levels continue to favour buyers.