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Source: ONE News -
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Given Christchurch's earthquake and the collapse of South Canterbury Finance this month, it now seems very unlikely the Reserve Bank will hike the cost of borrowing again next week.
As it was, a string of poor local and international economic data in August had already been casting doubt on another hike.
Although some of the more hawkish economists out there (prior to the weekend that is) felt Allan Bollard did still need to squeeze in one more hike.
The question now though is whether there will be any more hikes at all before the end of the year.
The NZIER seems adamant that an increase is not warranted before March next year - while the BNZ felt prior to the quake that two pauses were in the offing this year.
One note of caution though.
ANZ National's Cameron Bagrie says while there is now little chance of any increase next week, Saturday's earthquake could eventually lead to a strong pick up in activity in the South Island economy next year.
And Bargie warns this means that when Bollard does finally start to hike, it could come in bigger hits than it otherwise might have done.
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