Economists predict that the Reserve Bank will again leave rates on hold when it reviews the cost of borrowing on Thursday.

The central bank has kept the official cash rate at its record low of 2.5% since last April.

Though the bank has signalled that rates will rise in the middle of this year, economists are divided over when exactly this will be.

ASB chief economist Nick Tuffley says a string of weak economic data has taken the glow off the recovery, so he’s nearly halved his forecast for economic growth in the first three months of the year to 0.4%.

Mr. Tuffley believes the Reserve Bank will wait until July to start raising interest rates.  He says the housing market is cooling, retail sales are becoming patchy and the drought is impacting on the economy. And recent inflation figures were quite modest, giving  the Reserve Bank breathing space.

However, economists at Westpac and Deutsche Bank believe rates will rise as early as June.