An improved dairying outlook and rebound in the strength of the New Zealand dollar, beyond Reserve Bank expectations, are also being cited for not cutting it to match the present record low of 2.5%.
Westpac chief economist Dominick Stephens believes Reserve Bank governor Graeme Wheeler has already ''let the cat out of the bag'', in a recent speech by reintroducing his concerns about the heated housing market.
''The [governor's] speech reinstated house prices as an issue of direct concern for monetary policy, and mentioned the risk of low interest rates inflaming the housing market,'' he said in a statement.
Mr Wheeler had ''downplayed'' the housing market effects in June, and in September ''pointedly omitted'' any forecast house prices.
''Clearly, the Reserve Bank has been rattled by the broadening beyond Auckland of the house price boom,'' Mr Stephens said.
Real estate data from several organisations during the past two months has shown increasing house prices in areas beyond Auckland, and also a shift of investor interest elsewhere, to places such as Dunedin with higher yielding rental properties.
Mr Stephens expects the OCR to remain at 2.75%, but the Reserve Bank to reiterate it expects further cuts, ''pencilling in'' December for the next cut, but not as a done deal.
ASB chief economist Nick Tuffley said while an October cut ''isn't totally out of the question'', he expected it to remain untouched and a 25 basis point cut to be made in December.
''The Reserve Bank appears comfortable to wait, though we believe an immediate cut would be more prudent,'' Mr Tuffley said.
BNZ head of research Stephen Toplis said he was ''ambivalent'' as to whether the Reserve Bank cuts on Thursday or waits until the next opportunity, in December; but the OCR would be at 2.5% by year's end.
''Yes, the most recent local [economic] data have calmed nerves about a bigger slowdown in the New Zealand economy. But the currency has rebounded to be around 7% higher than the Reserve Bank assumed,'' he said in a statement.
He said imminent third quarter labour market data was the most important factor at present, with employment indicators ''firmly positive but not quite as firm as before'', labour supply ''unambiguously strong'' and he anticipated unemployment to ''continue ticking higher''.
