Kiwi in the coalmine? Why NZ will show BoE the way on rate hikes

Analysts suggest the Bank of England may look to an unlikely source for interest rate guidance after New Zealand today became the first developed market to raise rates since the financial crisis.

The Reserve Bank of New Zealand (RBNZ) raised rates from 2.5% to 2.75% overnight, the first G10 central bank to raise rates since 2008, with the UK anticipated to be next in line. There are differences between the NZ and the UK economic upswings - the former has witnessed an export led boom and rising inflation rates - but this does not mean the NZ experience is "irrelevant for the UK", according to HSBC global head of FX research David Bloom. "In a world where central banks will be trying to exit unprecedented monetary accommodation, the RBNZ experience will be closely followed," he ...