The Reserve Bank has raised the official interest rate by 50 basis points to 3% this afternoon.
This is the fifth time the Official Cash Rate (OCR) has been raised this year, having seen previous rises in February, April, May and July.
It's the seventh consecutive time the Reserve Bank has opted for a rates rise and today's rise was anticipated.
It's the seventh consecutive time the Reserve Bank has opted for a rise. (Source: 1News)
With fierce competition between banks, it's unclear if the latest rise will have an immediate impact on mortgage rates.
READ MORE: As mortgage lending drops, banks seek new ways to entice
In a statement on Wednesday afternoon, the Reserve Bank said the raise was necessary to, "Maintain price stability and contribute to maximum sustainable employment.
"Core consumer price inflation remains too high and labour resources remain scarce."
The ongoing Covid-19 pandemic and war in Ukraine were also factors in the decision.
"The outlook for global growth continues to weaken, reflecting the ongoing tightening in global monetary conditions."
However, spending levels in New Zealand was one bright spot in the report.
"Domestic spending has remained resilient to global and local headwinds to date.
"Spending levels are supported by a robust employment level, continued fiscal support, an elevated terms of trade, and sound household balance sheets in aggregate."
It comes as Reserve Bank data shows there was around $6 billion in new residential mortgage lending in June, compared to $8 billion at the same time last year.
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