Even higher interest rates forecast

ANZ has dramatically increased its inflation forecast because of the war against Ukraine. Its economists now say the Consumers Price Index (CPI) will peak at 7.4% in the second quarter of this year, rather and its earlier forecast of 6.4%. 

It is also above the level forecast by the Reserve Bank (RBNZ).

It is now sayin that the official cash rate will peak at 3.5% in April 2023, rather than its earlier forecast of 3%. Currently, the OCR sits at 1%.
 
They say the rise in commodity prices such as oil and wheat will flow on to other parts of the economy. 

The “change comes primarily on the back of our updated CPI (consumers price index) forecasts that now have inflation peaking at a broad-based 7.4% in Q2, rather than the RBNZ’s MPS (monetary policy statement) forecast of a 6.6% peak in Q1”, ANZ chief economist Sharon Zollner says.
 
These forecasts could encourage mortgage holders to seek to lock in  longer-term borrowings via their brokers than they do now.
 
The ASB is also hawkish on inflation – its number is less precise than the ANZ's – but is in the same ballpark: above 7%.
 
Like the ANZ, the ASB thinks this will worry the RBNZ. But it is still forecasting 25 point rises in the OCR, not 50 point hikes.
 
Kiwibank thinks the OCR will rise steadily to to 3% and thinks inflation will  surpass the RBNZ's figure of 6.6%, but it does not say by how much.   
 
New Zealand's inflation outlook will be affected by experience in the United States, with Reuters reporting a consensus among economists of 7.9% when the official number comes out this week.