Economists are warning the official cash rate (OCR) will need to be hiked again, with banks revising their previous forecasts.
It comes after the Reserve Bank's (RBNZ) last meeting in July, where the cash rate was left unchanged at 5.5 percent - the first pause in the tightening cycle since 2021.
That decision came amid softening inflation and subsequent forecasts said the OCR would sit at that level for a while, with the central bank believing it had done enough to dampen demand in the economy and cool inflation - which has dropped to 6 percent from its 7.3 percent peak.
But ANZ chief economist Sharon Zollner told AM she believes the RBNZ will need to lift the OCR to 5.75 percent at its November review.
ANZ's forecasts were in line with Westpac's economic overview from Thursday, with the latter saying it also expected a final 25 basis point rise later this year.
"It takes 18 months - even two years - for the full impact of monetary policy to work its way through," Zollner explained.
"In that context, it's very valid for the Reserve Bank to say, 'Okay, we think we've done enough - we'll wait and see what happens.' But our take on it is they will eventually conclude they will need to do more."
She said a 5.5 percent OCR peak was "optimistic" and 5.75 percent more realistic.
"There are obviously sectors of the economy that are very much feeling what the Reserve Bank has done already; house prices have fallen nearly 17 percent but they do seem to have found a floor at the moment, builders… are very pessimistic about the outlook for construction, for example, and those selling discretionary retail - luxury items or durables - they are definitely feeling the chill of those higher interest rates," Zollner said.
"But it does take time to feed through and, at the moment, people rightly or wrongly are feeling their job security is excellent, they've had strong wage growth, we've had very strong employment growth so people are actually - for now - not changing their behaviour in huge ways."
The wider impact of higher interest rates on the whole economy was still to come, she said.
RBNZ's next monetary policy statement, which sets out its forecasts, is due on Wednesday.
Zollner said it was more than likely the central bank would stick with the less aggressive approach next week - for now.
"We're not expecting them to raise rates next week, nobody is - there's a pretty clear consensus that they will leave rates unchanged.
"However, we and some other commentators are expecting that, eventually, they will decide they have more work to do - so we have another rate hike pencilled in for November."
Zollner said ANZ didn't see the economy "capitulating" as quickly as the RBNZ had forecast.
"In particular, we don't see unemployment rising as rapidly."
While the RBNZ in May forecasted unemployment to rise to 4.6 percent at the end of the year, ANZ believed it would only reach 4.2 percent by that time.
