For the first time in more than two years, the economy is going backward, by 0.3 per cent in the past three months, according to a National Bank report – but the bank still expects a “soft landing”.
Parts of the economy appear to be hit by rising mortgage interest rates, with falling house sales across all regions for the past six months. That is typically followed by lower house prices, waning consumer confidence and falling shop sales, though that has not happened yet.
“Things are very unsettled, and looking out is tricky, with higher mortgage rates to slow the housing market, but commodity prices are picking up,” National Bank economist Steve Edwards said. “It is a topsy-turvy time in the business cycle.”