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The Reserve Bank has lifted the Official Cash Rate to 2.75 per cent.
A rise in the rate from 2.5 to 2.75 per cent today was seen as a virtual certainty, so the focus will be put on the Reserve Bank's economic forecasts given out this morning and what they portend about the pace and extent of the tightening to come.
The Reserve Bank has held rates steady at 2.5 per cent for the past two years. The last time the rate changed was 10 March 2011, when then governor Alan Bollard cut the rate by 0.5 per cent from 3 per cent to the current 2.5 per cent.
This morning's expected hike "would have to be a contender for the best-signalled monetary policy move in the country's history", Westpac economist Michael Gordon said last week.
"Interest rate markets have been tipping a March start date for several months, home owners are reportedly fixing their mortgage rates in greater numbers, and the latest ANZ Business Outlook found that a net 90 per cent of firms expect interest rates to rise over the next year - the highest reading in the 21-year history of this survey question," he said.
A Reuters poll of 17 financial institutions found only one (Moody's) not expecting the OCR to be raised today and a consensus is that it will be a full percentage point higher at 3.5 per cent by the end of this year.