NZ: CPI rose 0.4% in June quarter – Westpac

Michael Gordon, Senior Economist at Westpac, notes that New Zealand’s consumer prices rose 0.4% in the June quarter, lifting the annual inflation rate from 1.1% to 1.5%.

Key Quotes

“Fuel and food prices made the biggest contribution, but a range of ‘core’ measures of inflation also rose modestly on an annual basis.”

“The details were firmer than the headline. Tradables inflation was soft, partly due to some unusual factors, but the more persistent non-tradables component was stronger than expected.”

“Annual inflation rose from 1.1% to 1.5%, and we expect a further increase into year-end. However, this partly reflects soft CPI outturns a year ago; the underlying trend is more of a gradual pickup in inflation pressures.”

“We continue to expect the Reserve Bank to keep the OCR on hold for some time.”