Uncertainty regarding the sustainability of the international recovery continued to take its toll on financial markets, and has finally translated into some slight weakening in commodity prices.

The NZIER’s Quarterly Survey of Business Opinion was softer than expected – suggesting that activity in the New Zealand economy is still weak. Even so, there are sufficient signs of recovery for the Reserve Bank to continue lifting interest rates. Inflation expectations have been rising, business and consumer confidence remain historically elevated, and commodity prices are still at a high level.

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