Reserve Bank governor Alan Bollard today cut the Official Cash Rate (OCR) to 8 percent from 8.25 percent, the first rate cut in five years.

He cut in spite of annual inflation being 4 percent and expected to hit 5 percent this quarter, citing a rapidly slowing economy.

Economists on average assessed there was a 57 percent chance Dr Bollard was going to move today rather than in September as he indicated last month.