The Reserve Bank of New Zealand is widely tipped to deliver an early Christmas present for homeowners by cutting the official cash rate on Thursday.

Economists are expecting the bank's governor Graeme Wheeler to trim 25 basis points off the rate bringing it to 2.5 per cent.

Only three of 24 economists polled by Reuters thought there would be no action by Mr Wheeler.
However the Institute of Economic Research's Shadow Board has recommended the rate remains at 2.75 per cent.

Mr Wheeler has to weigh up signs of an increase in economic activity as the full effects of previous cuts takes hold, indications that moves to arrest the Auckland housing boom are starting to bear fruit and a desire to keep the annual rate of inflation within the 1-3 per cent target band.

The monetary policy statement, announced at the same time as the official cash rate decision, will provide an insight into whether the Reserve Bank believes cuts are on the cards next year.