Wellington |The Reserve Bank of New Zealand has just made life much tougher for Jacinda Ardern’s Labour Government, heading into an election year.

Not only did the freshly reappointed Governor Adrian Orr and the bank’s relatively new Monetary Policy Committee jack up its official cash rate by 75 basis points – the biggest hike in the bank’s history – it also forecast inflation rising further from its current 7.3 per cent and a “shallow” year-long recession kicking in at the middle of next year.