New Zealand’s latest consumer price index was flat which has increased expectation that RBNZ will keep interest rates at 1.75% for the foreseeable future
New Zealand’s latest consumer price index was flat which has increased expectation that RBNZ will keep interest rates at 1.75% for the foreseeable future.
The inflation figures released this week show that many household costs are rising but budgets are being kept in check for many families due to lower petrol costs.
Stats NZ said that inflation was at 0% in the June 2017 quarter and down 0.1% after seasonal adjustment.
However, house prices continued to rise, 0.8% in the quarter and 3.6% for the year. Auckland saw a 3% increase, Canterbury 0.8% and Wellington 0.5%.
Other household expenses have also increased, adding extra costs to homeowners but also to potential first-home buyers. Rents were also higher in most areas (0.4% nationally) but declined 1.6% in Canterbury.
"Household basics like rent, food, and electricity all hit consumers' pockets harder this quarter," prices senior manager Jason Attewell said. "Offsetting these price rises were falls in domestic airfares and petrol prices – which fell on average by 4 cents a litre."
Experts believe that the soft data means that a rise in interest rates is unlikely; great news for New Zealand homeowners and first-home buyers.
"We see the data reinforcing the RBNZ's decisively neutral policy stance for some time," Jason Wong, currency strategist at Bank of New Zealand told the NZ Herald. "If anything, inflation is tracking below the Bank's projections.”
Financial markets had been hoping for a rise in inflation and a move on interest rates similar to the earlier-than-expected increase this month from the Bank of Canada.
The inflation figures released this week show that many household costs are rising but budgets are being kept in check for many families due to lower petrol costs.
Stats NZ said that inflation was at 0% in the June 2017 quarter and down 0.1% after seasonal adjustment.
However, house prices continued to rise, 0.8% in the quarter and 3.6% for the year. Auckland saw a 3% increase, Canterbury 0.8% and Wellington 0.5%.
Other household expenses have also increased, adding extra costs to homeowners but also to potential first-home buyers. Rents were also higher in most areas (0.4% nationally) but declined 1.6% in Canterbury.
"Household basics like rent, food, and electricity all hit consumers' pockets harder this quarter," prices senior manager Jason Attewell said. "Offsetting these price rises were falls in domestic airfares and petrol prices – which fell on average by 4 cents a litre."
Experts believe that the soft data means that a rise in interest rates is unlikely; great news for New Zealand homeowners and first-home buyers.
"We see the data reinforcing the RBNZ's decisively neutral policy stance for some time," Jason Wong, currency strategist at Bank of New Zealand told the NZ Herald. "If anything, inflation is tracking below the Bank's projections.”
Financial markets had been hoping for a rise in inflation and a move on interest rates similar to the earlier-than-expected increase this month from the Bank of Canada.
