Reserve Bank grapples with surging unemployment

Thursday 5 February 2026

The Reserve Bank of New Zealand has slashed the official cash rate (OCR) by half (2.25%) since mid-2024:

These rate cuts by the Reserve Bank have reduced mortgage borrowing costs dramatically, as illustrated below by Justin Fabo from Antipodean Macro:

Normally, such a sharp reduction in interest rates would stimulate activity, leading to a rebound in the labour market.

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About the author

Leith van Onselen is Chief Economist at the MB Fund and MB Super. He is also a co-founder of MacroBusiness. Leith has previously worked at the Australian Treasury, Victorian Treasury and Goldman Sachs.