Dr Bollard again kept the Official Cash Rate (OCR) at 2.5%. It has been the same since 10th March 2011. He also said that economic growth until the end of March next year will only be 2%, not more than 3% which he predicted three months ago. The reason is the drop in export incomes because of the problems in Europe. He said there are too many unknown factors that could happen in Europe. One of the unknowns is the Greek election result next weekend.

　　For the next nine months, New Zealand will have lower GDP and higher inflation but compared with many European countries, we are not doing too badly. Mortgage interest rates for homes are still low so maybe now is a good time for first home buyers.

　　Vocabulary

　　predicted – forecast, thought about the future

　　factors – matters, issues, things

　　unknowns – noun from the adjective ‘unknown’

　　GDP – Gross Domestic Product measures the value of the economy

　　inflation – increase in prices