Friday, October 28, 2005

Three Things About the Increased OCR

1. Dr Bollard has moved too little too late. His timidity a year ago has cost us all big time. The changes to the OCR will only increase the exchange rate for now and hold it high(er) for longer. The housing market is very resilient - killing that will not help export business in the short and medium term cope with a tough exchange rate.

2. Dr Cullen said "Vote Labour" as a vote for National's Tax Cuts will lead to increased interest rates.... Well Dr Cullen, the ink is barely dry on the writs and we have increased interest rates on your watch. I would have preferred the tax cut - at least I would have something to pay the increased interest with...

3. The big contributors to inflation are Government and local Government charges and the state operating monopolies - energy companies. I run a SME and price increases are impossible to gain. We cannot even pass on fuel related costs.

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