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NZ retail sales rise as confidence improves

New Zealand retail sales increased for the fifth time in six months in January as consumer confidence rose and stores dropped prices to attract customers during their summer holiday.

Reserve Bank Governor Alan Bollard, who has kept the official cash rate at 2.5 percent since April, yesterday said he may start raising borrowing costs around the middle of 2010 as the economy recovers from its worst recession in three decades. Consumer confidence advanced to a three-year high in January, according to an index compiled by Roy Morgan Research and ANZ National Bank Ltd.

"Consumers feel more confident about purchasing big-ticket items," Nick Tuffley, chief economist at ASB Bank Ltd in Auckland, said ahead of the report. The data should "continue to point to a gradual recovery in consumer spending," he added.