The ongoing geopolitical uncertainty in the Middle East that reigns as I write this article continues to affect economies around the world, with New Zealand, despite our somewhat remote location, feeling the economic pressure as much as most. We’ve had some positive indications in recent times that our economy is picking up, but it seems that every time some positivity is identified, someone somewhere else in the world makes a decision that sets us back again.

I have some sympathy for the economists who are trying to predict the economic landscape that lies ahead, as their role has been and remains almost impossible due mainly to circumstances beyond their control. In the same vein, the Reserve Bank Of New Zealand (RBNZ) has the unenviable task of setting the Official Cash Rate (OCR) during these volatile times, as they continue to grapple with inflation which is also being fuelled largely by happenings offshore.
In July, the RBNZ decided to increase the OCR by 25 basis points to 2.5%, which was the first increase in three years, and further increases later this year which had previously been signalled as likely, now seem certain to happen. As these expected increases are implemented, it remains to be seen how interest rates at the banks will be affected, with many already building in increases prior to these future announcements.
For many businesses and households, the financial pressures they have been under for a long time show no real signs of easing by any significant degree, as the cost of living still bites into household budgets, restricting consumer spending. The knock-on effect of this for many businesses, as their income reduces and cashflow becomes more restricted, is that they have to remain in survival mode for longer, or any plans to expand or invest are put on hold. 
With all that’s happening, it’s not difficult to see why our economic recovery has been and remains difficult and slow. Indeed, the financial pressures that people are encountering have probably been further exacerbated by the recent 7.9% average increase in household rates and the average increase in commercial rates of around 9.8%, especially when added to the increase of around 7.2% in water rates. 
Many of Business North Harbour’s not-for-profit members report an increase in the demand for their services, particularly food rescue services and budgeting advice, further evidence if it were needed that an increasing number of people are struggling to make ends meet despite their best efforts. 
I sincerely hope that we soon see a significant decrease in these financial pressures across the board and would again ask you to keep supporting our local businesses whenever you can. 
 
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