The Reserve Bank has softened its language in the July Monetary Policy Review, leaving the cash rate unchanged at 5.5% 

It's now saying inflation will make the 1-3% target this year. 

Kiwibank economists say it's a move that has increased market confidence in a rate cut later this year. 

Chief Economist Jarrod Kerr told Kerre Woodham that we’ve been in a recession for a year and a half, and it’ll take some rate cuts to jolt us out of it. 

He said that they are optimistic and have been telling clients that next year will be better than this year, but it will take cuts. 

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