VIEW: Westpac: How Strong Will The Lockdown Handbrake Be?

Westpac note that "the RBNZ's statement was much in line with what we expected: it intends to lift interest rates over the coming years, but held fire this time given the level of uncertainty about this new outbreak. Indeed, while the projected OCR track - which was likely adjusted to reflect today's decision - still implied at least one rate hike by the end of this year, it's too early to take any meaningful guidance from this as to the timing of the first move."

• "Experience shows that economic activity tends to bounce back readily when Covid restrictions are lifted. Once that happens, the RBNZ will be faced with much the same issues as before in terms of capacity constraints. The issue is the extent to which the lockdown acts as a handbrake on demand, which had otherwise been rapidly building momentum this year."