Summarised by Centrist
Inflation has hit 3% for the year to September, marking the highest cost-of-living increase in 15 months and driven largely by record power bills and higher local rates.
Stats NZ says electricity prices rose 11.3%, the biggest jump since 1989, while rates increased 8.8% and rents 2.6%.
The Reserve Bank’s target band is 1% to 3%, meaning inflation has once again touched the upper limit. Economists say overall inflation is expected to ease through 2026.
ASB expects a 25-basis-point cut to the Official Cash Rate in November, with more possible if growth remains weak.
Power costs alone accounted for more than a tenth of this quarter’s inflation rise.
Food prices edged down slightly at just over 4 percent compared with 5 percent previously. But Smith said that since 2019, overall living costs have climbed about 25 percent, with essentials like food and housing rising even faster. “Little wonder households feel under the pump,” he said.
Rent increases were the smallest in four years, though regional differences varied. Canterbury and the rest of the South Island saw rents rise over 4 percent, while Wellington was flat at 0.1 percent. Rates, measured annually in September, rose less than last year’s more than 12 percent spike but remain well above the long-term average.
Economists say the latest figures show inflation pressures are shifting from imported goods to domestic costs in a sign that households are still paying the price for years of post-Covid volatility.
