GBP

 

Despite weak UK growth figures, the BOE seems much more concerned about getting inflation back towards the 2% target range. The BOE's inflation forecasts remain high. This week BOE Lombardelli also affirmed the BOE's focus on **services inflation** and **wages** which also remains high. A contrast in BOE member Dhingra's comments was detected. She highlighted the fact that the fall in PPI services appears to be slowing, which still leaves fears of high inflation.

 

NZD

 

The RBNZ cut interest rates by 50 bps as expected to 4.25%. The RBNZ revised interest rates down to 4.07% in March from 4.62% previously and 3.55% in December 2025 from 3.85% previously. Governor Orr reported on 27 November that the direction of rates is consistent with a 50 bps cut in February and that neutral rates would be between 2.5% and 3.5%. In second-tier data, New Zealand retail sales continue to deteriorate with Q3 annualised retail sales in negative territory at -2.5% marking a clear contraction Q4 2022.  Analysts at ANZ have also revised upwards a 50 bps decline in February vs 25 bps at the start of the week. (The same applies to Westpac)