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# New Zealand's Reserve Bank is expected to lift rates to 3% on Wednesday, ten days before the election
- URL: https://www.sharespective.com/stories/new-zealands-reserve-bank-expected-lift-2026-10-26/
- Published: 2026-10-25T21:15:01.000Z
- Updated: 2026-10-25T21:50:38.000Z
- Description: The Reserve Bank of New Zealand decides at 2pm on Wednesday in Wellington, noon in Sydney. It is expected to lift the official cash rate a quarter-point to 3%, its third rise in a row.
- Author: Shaun Botha
- Tags: Economy, #story, #group-economy

The Reserve Bank of New Zealand decides at 2pm on Wednesday in Wellington, noon in Sydney. It is expected to lift the official cash rate a quarter-point to 3%, its third rise in a row.

**Three weeks ago this looked like a coin toss.** In early October, markets put the chance of a rise at about 58%. ASB's Mark Smith now reckons it is about 90% priced in, and BNZ, ANZ, ASB, Kiwibank and Westpac all expect it.

Inflation is the reason. Prices rose 3.7% in the year to September, above the 1% to 3% target. ASB expects annual inflation of 4.7% by the December quarter, as fuel and a weaker kiwi push up import costs.

![Chart: New Zealand's interest rates climb again. New Zealand's 3-month interbank rate by month, October 2016 to September 2026, in percent. The cash rate is expected to rise to 3% on Wednesday.](https://storage.ghost.io/c/02/71/0271df32-cec6-421f-9f13-b06ab90e54c1/content/images/2026/10/new-zealands-reserve-bank-expected-lift-2026-10-26-chart.jpg)

This story’s chart of the day.

Australia gets its own test the same day, when September-quarter inflation figures land at 11.30am in Sydney, 1.30pm in Auckland. The RBA's cash rate is already 4.60%, and inflation reached 4.0% in August.

Its deputy governor, Andrew Hauser, warned last week that the outlook is much worse than the bank had forecast. Market odds of a rise to 4.85% on 3 November, Melbourne Cup Day, jumped from about 20% to around half.

The longer view 

Westpac's Kelly Eckhold expects the cash rate to reach 4% by September 2027, and says a split vote on Wednesday seems very possible. For anyone refixing a mortgage, that path matters more than this week's quarter-point.

[ This story ran in Show Us the Money Monday 26 October’s edition, with the market snapshot, the other two stories, the numbers and the week ahead. Read the whole edition → ](https://www.sharespective.com/sharespective-2026-10-26/)