The GDP result is only one of three factors in this morning’s slide.

The Reserve Bank is waiting to see how global economic turmoil affects New Zealand before it raises interest rates again.

Decoding the governor's monetary policy statement, issued after rates were left at a record-low 2.5% this morning.

Reserve Bank governor Alan Bollard has hiked the official cash rate by 25 basis points to 3% and accompanied it with decidedly downbeat comments about the economy.

This unusual combination - which follows the formula adopted by the Bank of Canada last week – reflects both the relatively low levels of the OCR as well as a fragile world economy and a softening domestic market.

The Reserve Bank this morning increased the official cash rate from 2.5% to 2.75%.

The move surprised few: the overnight index swap market had priced in a rate rise and Reserve Bank governor Alan Bollard signalled at the end of April he planned lifting the OCR “over the coming months.”

Yet the accompanying statement is opaque as to the likely timing and extent of further rate rises.