Recession, no great escape: GDP data confirms economy took another hit in first quarter

“That’s to be expected - indeed it would be staggering if it didn’t happen, in light of the substantial rise in interest rates over the last two years,” Gordon said. In wholesale interest rates, the two-year swap rate eased to 5.37 per cent from 5.39. “Demand is being weighted down by rising interest rates. We may see the unemployment rate rising to 5-5.5 per cent in 2024.”But as the labour market loosened, its inflationary impulse would soften. “But it’s only one data point, and a backwards-looking one – business survey, inflation and labour market data over the coming quarters will be key things to watch.”Liam Dann is Business Editor at Large for the New Zealand Herald.