Councils sure – they don’t face a proper price mechanism. However, telling power companies not to react to market signals smacks of desperation – it isn’t up to companies and workers not to act in there best interest, its up to him to keep inflation down.

Next thing he’ll be telling workers to keep wage demands low – oww he’s already done that 😉

“Interesting too that the banks appear not to be passing much on in mortgage rates”

Indeed. I wouldn’t want to conclude much until the end of the day. Even after that, we’ll give it a week and see what happens. The tightness of credit conditions is an incredibly difficult issue to get your figure on the pulse of at the moment.

Interesting comment from Bollard on domestic inflation. He talked in more detail at the press conference about how the power companies and councils need to get real and join the rest of the world by stopping putting up prices.
Nice to get some hawkish words, even if they are only words on the day of a 100 bps cut.
Interesting too that the banks appear not to be passing much on in mortgage rates. Kiwibank is cutting just 20 bps off its 2 year fixed rates.
cheers
Bernard