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Comments from Finance and Mortgage Advisers Association of New Zealand (FAMNZ) managing director Peter White AM – RBNZ interest rate decision

“Consumers have been waiting for this, and every rate cut improves affordability for mortgage holders, which is a positive step.

“However I would urge those who can afford to keep up their current level of repayments to do so, as this will protect them and give them a buffer when rates rise again. Every dollar paid over the principal saves interest in the long run.

“Today’s Reserve Bank decision also increases the borrowing capacity of prospective homebuyers, enabling more to step into the market.

“With lower repayments, many existing owners will have questions around possible refinancing options, and I’d encourage them to see a mortgage adviser to provide the best advice and ensure their interests are looked after.”

“Make sure your bank passes on the rate cut in full and quickly, and if they don’t you should call them. If they can’t help you it may be time to look elsewhere.

“It is a competitive market and each lender has different products. The important things is to ensure your mortgage is best suited to your individual circumstances and goals.

“Mortgage advisers not only focus on what is best for you, but have access to a wide range of products not available through traditional lenders.”

Annual consumers price index inflation is currently around the top of the Monetary Policy Committee’s 1 to 3 percent target band. However, with spare capacity in the economy, inflation is expected to return to around the 2 percent target mid-point over the first half of 2026.

Economic activity through the middle of 2025 was weak. In part, this reflects domestic constraints on the supply of goods and services in some industries, and the impact of global economic policy uncertainty. Household consumption is recovering, partly because of lower interest rates, and elevated commodity prices continue to support the primary sector. House prices are flat, and residential and business investment remain weak.

Economic growth in New Zealand’s trading partners is proving resilient, partly because of strong investment in AI-related activity, but is expected to slow in 2026.

There are upside and downside risks to the inflation outlook in New Zealand. Cautious behaviour by households and businesses could slow the economic recovery, reducing medium-term inflation pressure. Alternatively, higher near-term inflation could prove to be more persistent.

On balance, the Committee reached consensus to reduce the OCR by 50 basis points to 2.5 percent. The Committee remains open to further reductions in the OCR as required for inflation to settle sustainably near the 2 percent target mid-point in the medium term.

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Summary record of meeting — October 2025

Annual consumers price index (CPI) inflation remains within the Monetary Policy Committee’s 1 to 3 percent target band. While inflation is currently near the top of the band, spare capacity is consistent with headline inflation returning towards the target mid-point in the first half of 2026.

Annual CPI inflation is expected to converge to the target midpoint

The Committee considers all economic developments as they relate to its medium-term inflation target. Annual CPI inflation is expected to converge to the mid-point of the target range in the first half of next year as tradables inflation pressures dissipate and spare capacity continues to moderate domestically generated inflation.

The Committee noted that headline inflation is projected to have reached 3.0 percent in the September 2025 quarter, reflecting large increases in administered prices, food prices, and the prices of other tradable goods and services. Excluding the influence of administered prices, quarterly non-tradables inflation has continued to decline and is at levels consistent with price stability.
 

There is significant spare capacity in the domestic economy

The Committee discussed the contraction in GDP in the second quarter of 2025, which was considerably larger than expected. The Committee noted that an unusually large seasonal balancing item contributed to the weakness in the headline figure. This is expected to be reversed during the remainder of the year and is not assumed to have material implications for monetary policy.

Additionally, some industry-specific factors may have constrained supply. For example, high milk prices and unfavourable weather conditions likely contributed to higher livestock retention and lower meat production. Limited access to domestic energy sources and higher energy prices are likely to have weighed on manufacturing more generally. These factors reflect lower supply capacity, rather than weaker demand.

Consequently, the Committee has revised its assessment of current spare capacity only marginally in response to new GDP and activity data, but note that the new data imply some downside risk.

More timely indicators suggest that economic activity recovered modestly in the September quarter, but there remains significant spare capacity in the New Zealand economy.

Lower interest rates will support a recovery in growth

The Committee discussed the transmission of monetary policy. Wholesale interest rates have fallen since the August Statement, particularly at shorter terms. This has resulted in lower rates on business lending, mortgage lending, and term deposits, supporting new borrowing and investment. The average interest rate on existing mortgages is expected to continue to decline over the coming year as mortgage holders re-fix onto lower rates, reducing debt servicing costs for households.

The Committee discussed the outlook for interest-rate-sensitive parts of the economy. Slow growth in disposable incomes and house prices continue to weigh on economic activity, but lower interest rates are supporting a recovery in consumption. Construction activity is projected to recover from mid-2026 as demand for dwellings recovers and house price growth resumes. The Committee expects this to reduce spare capacity in the economy and support an increase in business investment, even as export prices moderate from elevated levels, and government spending declines as a share of the economy.

Trading partner growth has been resilient but is expected to slow

The Committee discussed the impact of trade restrictions and tariffs on the global economy. Aggregate global trade volumes and economic activity have so far proven resilient. Growth forecasts for 2025 have been revised higher for many of our trading partners, particularly for China, Taiwan, and some other Asian economies. This reflects increased investment in AI-related industries, adaptation of trade flows and global supply chains to new tariffs and trade restrictions, and accommodative fiscal and monetary policy in some economies. However, growth expectations for 2026 have recovered to a lesser extent, with trading-partner growth expected to slow.

Global inflation has continued to decline through 2025. Inflation is especially low throughout Asia, and negative in China. Headline inflation in the United States has increased, but evidence suggests that pass-through of tariffs to consumer prices has so far been weaker than expected. To date, there is little evidence of a material impact of tariffs on the prices of New Zealand’s imports or exports. The Committee continues to expect that the total net effect of global tariffs on the New Zealand economy will be disinflationary.  

Economic activity in New Zealand has been subdued relative to other economies, resulting in a lower exchange rate. This, together with high commodity export prices, is providing some support to the domestic economy in the very near term, particularly in rural and exporting regions of New Zealand. If sustained, a lower exchange rate may limit the pass-through of lower international prices for imported goods to New Zealand.

There are upside and downside risks to the global growth outlook

The Committee discussed whether recent global developments presented upside or downside risk to inflationary pressure in New Zealand. On the upside, global economic activity has been stronger than anticipated and measures of uncertainty have fallen. In the near term, resilient global demand and a low New Zealand dollar exchange rate may provide more support than expected for New Zealand exports and growth, as well as higher inflation.

On the downside, there is uncertainty about how long elevated equity prices and increased investment activity in the AI technology sector will be sustained. In addition, political and institutional uncertainty in some economies and heightened geopolitical risk may contribute to higher term premia and increased volatility in bond markets. Furthermore, resilient global growth in 2025 may represent a difference in the timing, rather than the extent, of the negative impacts of trade restrictions on growth.

There are upside and downside risks to domestic inflationary pressure

The Committee discussed upside risks to domestic inflation. Businesses continue to face cost pressures from administered prices, such as local council rates, and some energy charges. The Committee’s central expectation is that inflation reached 3.0 percent in the September quarter. Given the two-sided uncertainty around any forecast, there is a material possibility that September quarter inflation was outside the target band. If inflation was to remain higher for longer than expected, there is a risk that this influences inflation expectations and wage- and price-setting behaviour over the medium term.

The Committee discussed the risk that potential output growth could slow by more than currently expected. Growth in potential output is being constrained by subdued investment, low productivity, and low population growth through net immigration. This limits the rate of growth the economy can sustain without generating additional inflationary pressure. In an environment of constrained supply, inflation could stay elevated for longer as demand recovers.

The Committee discussed downside risks to domestic demand and inflation. There remains a risk that excess precaution from households and businesses dampens consumption and investment by more than currently assumed. There is also a risk that declines in short-term interest rates may not provide sufficient support for growth. Borrowing and investment decisions are influenced by interest rates across the entire yield curve, and interest rates at the 5-year tenor have not fallen as far as rates at shorter maturities.

The Committee agreed to reduce the OCR by 50 basis points to 2.5 percent

In light of recent economic developments and the balance of risk, the Committee discussed the options of reducing the OCR by 25 basis points or by 50 basis points at this meeting.

The case for reducing the OCR by 25 basis points emphasised that past reductions in the OCR continue to transmit through the economy and there are signs of recovery in consumption and employment growth. Some members highlighted that constrained supply and cost pressures on businesses present upside risks to inflation. Financial conditions are influenced by the current level and expected future path of the OCR. Reducing the OCR by 25 basis points at this meeting, and signalling that further easing is likely in November, could be sufficient to deliver a sustained economic recovery while giving the Committee confidence that inflation will converge quickly to the 2 percent target mid-point.

The case for reducing the OCR by 50 basis points emphasised prolonged spare capacity and the associated downside risk to medium-term activity and inflation. Domestic inflationary pressures have continued to moderate as projected, giving the Committee more confidence that inflationary pressures are contained. Some members continue to put relatively more weight on the risk that excess precaution by households and businesses and, therefore, subdued economic activity and employment persists. A larger reduction in the OCR could mitigate this risk by providing a clear signal that supports consumption and investment.

On balance, on Wednesday 8 October the Committee reached consensus to reduce the OCR by 50 basis points to 2.5 percent. The Committee remains open to further reductions in the OCR as required for inflation to settle sustainably near the 2 percent target mid-point in the medium term.

Attendees:

MPC Members: Christian Hawkesby (Chair), Carl Hansen, Hayley Gourley, Karen Silk, Paul Conway, Prasanna Gai  

Treasury Observer: James Beard

MPC Secretary: Evelyn Truong

8 October 2025 – Annual consumers price index inflation is currently around the top of the Monetary Policy Committee's 1 to 3 percent target band. However, with spare capacity in the economy, inflation is expected to return to around the 2 percent target mid-point over the first half of 2026.

Economic activity through the middle of 2025 was weak. In part, this reflects domestic constraints on the supply of goods and services in some industries, and the impact of global economic policy uncertainty. Household consumption is recovering, partly because of lower interest rates, and elevated commodity prices continue to support the primary sector. House prices are flat, and residential and business investment remain weak.

Economic growth in New Zealand's trading partners is proving resilient, partly because of strong investment in AI-related activity, but is expected to slow in 2026.

There are upside and downside risks to the inflation outlook in New Zealand. Cautious behaviour by households and businesses could slow the economic recovery, reducing medium-term inflation pressure. Alternatively, higher near-term inflation could prove to be more persistent.

On balance, the Committee reached consensus to reduce the OCR by 50 basis points to 2.5 percent. The Committee remains open to further reductions in the OCR as required for inflation to settle sustainably near the 2 percent target mid-point in the medium term.

Read the full statement and Record of Meeting: https://govt.us20.list-manage.com/track/click?u=bd316aa7ee4f5679c56377819&id=b1ee9a78d4&e=f3c68946f8

“Movement is one of the most powerful, underused tools we have for mental health, and it's available to everyone, every day.”

“The data is clear: Kiwis already understand the link between movement and mental wellbeing. Mental health consistently ranks as one of the top reasons people exercise, which tells us this message is resonating nationwide”

“As the leading voice for the exercise industry, our message is simple: move your body, support your mind, and do it together. Movement is one of the easiest, most powerful, yet underused tools we have for mental health, so let's use it!”

The 6th-12th October marks Mental Health Awareness Week, and ExerciseNZ is shining a light on one of the most underappreciated, yet effective forms of self-care: movement. ExerciseNZ CEO Richard Beddie consistently states that “Movement is one of the most powerful, underused tools we have for mental health, and it's available to everyone, every day.” This year's theme highlighted by the Mental Health Foundation of New Zealand, Top Up Together, is grounded in The Five Ways To Wellbeing, and is a reminder that our mental health is shaped by the small actions we take every day. One of the most powerful of those actions? Movement

A Leading Motivator for Movement

Movement is more than a physical intervention, it's a mental reset. Regular activity reduces anxiety and depression, improves sleep, builds confidence, and strengthens emotional resilience. According to the latest industry consumer survey, mental health remains within the top two reasons New Zealanders exercise. Mental health has consistently been a leading motivator; Beddie comments that “the data is clear: Kiwis already understand the link between movement and mental wellbeing. Mental health consistently ranks as one of the top reasons people exercise, which tells us this message is resonating nationwide”

Recent research continues to confirm this link:

• Recent research from Frontiers in Psychology finds that even short bursts of movement, such as 10 minutes, may boost mood and reduce psychological distress.
• A 2025 systematic review published in PubMed shows that engaging in structured physical exercise, even among high-stress populations, yields measurable improvements in mental health and quality of life.
• Evidence further supports the notion that  group or partner-based physical activity is particularly effective for reducing loneliness and increasing social connectedness.

Five Ways To Wellbeing In The Exercise Industry

The five ways to wellbeing provide a simple, evidence-based framework that the entire exercise industry can align with as a long-term commitment to supporting mental wellbeing:

• Whakawhanaunga/Connect: Create connections through group classes, partner workouts, or community walking/run groups that help members feel connected, seen and supported.
• Me Kori Tonu/Be Active: Provide diverse, inclusive, and enjoyable ways to move, catering to all ages, bodies, abilities, and cultural needs.
• Aro Tonu/Take Notice: Encourage mindfulness through breathwork, reflection, and goal setting.
• Ako Tonu/Keep Learning: Empower all to learn new techniques, try unfamiliar formats, and discover more about their body. 
• Tukua/Give: Give back by creating welcoming spaces, offering free intro sessions, or supporting members to uplift each other.

As we mark Mental Health Awareness Week, Exercise New Zealand is encouraging communities to see movement as a simple, powerful way to “top up” their wellbeing together. Aligned with The Five Ways To Wellbeing, moving our bodies connects us with others, grounds us in the present, and strengthens both mind and body. Whether it's through group classes, partner workouts, or a solo walk to reset, everyday movement is one of the most accessible ways we can support our mental health, together. Beddie concludes:

“As the leading voice for the exercise industry, our message is simple: move your body, support your mind, and do it together. Movement is one of the easiest, most powerful, yet underused tools we have for mental health, so let's use it!”

On World Octopus Day, New Zealand animal advocacy group Animals Aotearoa is calling on the Government to stop funding research into octopus farming and commit to banning the practice altogether, following the release of concerning new undercover footage and an international report exposing the problematic global expansion of this cruel new industry.

The new footage, released today by Compassion in World Farming, shows octopuses being forcibly submerged in icy water – taking up to ten minutes to die. It also shows the octopuses struggling to escape. This method, which causes prolonged agony, is likely to be used in the world's first proposed commercial octopus farm in Spain.

“Octopuses are highly intelligent, emotional animals who can feel pain and stress,” said Animals Aotearoa Executive Director, Marianne Macdonald.

“They can taste with their arms, sense light through their skin, and solve puzzles for fun. Seeing them die in such slow, cruel ways is unbearable. It's horrifying to think that right now, research in New Zealand is helping make this kind of factory farming possible.”

Animals Aotearoa has joined NGOs around the world in signing a new global pledge, organised by Compassion in World Farming, to 'Keep Them Wild', to signal their support to ban octopus farming and stop the unsustainable expansion of carnivorous aquaculture.

NZ research cloaked in secrecy

Animals Aotearoa has been investigating the extent of New Zealand's involvement in developing octopus farming, with University of Auckland researchers conducting experiments on the Gloomy octopus – the species being studied for potential commercial farming.

Despite repeated efforts, the group says it has faced “blocks at every turn” in its attempts to uncover how much public money is being used and whether new funding is planned.

“This year alone, we've sent eight Official Information Act requests to multiple agencies – including the Ministry for Primary Industries, the Ministry for the Environment, the Minister responsible for Animal Welfare, the University of Auckland, and MBIE's Endeavour Fund,” said Macdonald.

“This whole issue smells very fishy. Those involved are being very cagey about admitting what they're doing. Some OIA requests were ignored for months, others came back heavily redacted, and in some cases, the university only replied through legal advisors. Some responses contradicted each other. A lot of effort is being put into hiding the truth.”

Animals Aotearoa says one major research grant for octopus farming is due to expire, yet OIA responses both deny and confirm that the work is continuing.

“We've had to piece together conflicting answers like a puzzle,” said Macdonald. “Officials say they're not seeking new funding, but other documents describe the research as successful and ongoing. So where is the money coming from? And why is MBIE refusing to say if more octopus research funding is being sought?”

The organisation has now lodged a formal complaint with the Ombudsman challenging MBIE's refusal to release information.

Global report warns of devastating consequences

Coinciding with the footage, a new global report, The Growing Threat of Carnivorous Aquaculture, released by Compassion in World Farming, warns that octopus farming would have catastrophic impacts on animal welfare, food security, and marine ecosystems.

Key findings include:

Farmed octopuses could consume up to 90,700 tonnes of wild fish annually by 2040 – the equivalent of seven billion fish.
The world's first proposed octopus farm in Spain could use two billion fish in its first year just to feed the octopuses.
Feed for such farms would come from wild-caught fish in West Africa, South America and Southeast Asia, threatening the food security and livelihoods of coastal communities.

“Octopus farming is not sustainable – it's a shameful and misguided step backwards,” said Macdonald. “It would devastate wild fish populations, exploit animals fully capable of emotion and intelligence, and create yet another cruel, factory-farming industry. We need to stop this before it starts.”

Call for Government action

Animals Aotearoa is urging the New Zealand Government to:

Stop funding research to develop octopus farming.
Publicly rule out ever approving commercial octopus farming in Aotearoa, as well as experimental/pilot farms; and
Commit to transparency about how public funds are used for animal-based research..

“New Zealand has an opportunity to lead; to say we will not pursue or support this kind of cruelty,” said Macdonald. “Octopuses belong in the ocean, not in factory farms.”

Members of the public are encouraged to take action this World Octopus Day by emailing the Government at animalsaotearoa.org/stop-octopus-factory-farming.
 

About Animals Aotearoa
New Zealand's Animals Aotearoa is a registered charity whose mission is to improve the well-being of farmed animals and end their suffering.  Animals Aotearoa is one of nearly 100 organisations that make up the Open Wing Alliance, a global coalition of animal advocacy organisations, with the shared purpose of working to substantially improve the welfare of chickens, and they have now started work to protect the welfare of aquatic animals.

About  Compassion in World Farming

Compassion in World Farming was founded in 1967 by a British dairy farmer who became horrified at the development of intensive factory farming. Today, Compassion is one of the leading farmed animal welfare organisations dedicated to ending factory farming and achieving humane and sustainable food. With headquarters in the UK, they have offices across Europe, in the US, China and South Africa.  
 

Police in Ōtautahi/Christchurch have arrested dozens of peace activists taking part in a large-scale blockade of the National Aerospace Conference at Te Pae Christchurch Convention Centre. The protest, organised by Peace Action Ōtautahi, began early this morning as they positioned themselves at every entrance to Te Pae to disrupt access to the conference.

Police have been using violence and force to remove activists, with reports of one peaceful activist being dragged away by the neck and another punched in the back of the head by a police officer.