Retail spending jumped firmly during the June quarter but the 8% annualised pace of growth is unlikely to be sustained. The good data however, in conjunction with some better than expected numbers in the UK, Europe, China and the United States have pushed up both the NZD this week as well as fixed borrowing costs. The latter are on a multi-month uncertain oscillation upward which borrowers should be keeping a close eye on.
In a nutshell re the NZ economy. We all know that there are some big stimulatory factors starting up – construction and primary sector investment and incomes principally. The story for the next 2 – 3 years will be gauging the strength of these factors, how people spend, hire and invest on the basis of more business growth, and how inflationary pressures develop.