Politicians welcome OCR cut

RADIO NEW ZEALAND: Labour finance spokesperson Michael Cullen has welcomed the decision by the Reserve Bank to cut interest rates.

The bank cut its Official Cash Rate from 7.5% to 6.5% on Thursday in the face of warnings of a world recession.

Dr Cullen said he normally does not comment on the bank's decisions but acknowledges the rate cut is good news.

"That will help both business and homeowners because it will obviously look to reductions at the retail end."

The National Party leader John Key also said falling interest rates are good for businesses, homeowners and borrowers, but said more needs to be done to increase confidence and get the economy growing again.

However, New Zealand First leader Winston Peters said the drop in the Official Cash Rate was too little, too late.

Mr Peters has been pushing for a cut in interest rates for some time, and said the rate should have been lowered by at least 1.5 percentage points, and the cut should have been made months ago.