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Summarised by Centrist
New Zealand’s inflation rate stayed above the Reserve Bank’s 1 to 3 percent target band in the March quarter, coming in hotter than expected even before the full impact of the Middle East fuel shock has flowed through.
Bloomberg reports the Consumer Price Index rose 3.1 per cent from a year earlier, unchanged from the December quarter and above the 2.9 per cent economists had expected.
Quarterly inflation was also stronger than forecast, rising 0.9 per cent instead of the expected 0.8 per cent.
Bloomberg says the Reserve Bank is provisionally estimating inflation will accelerate to 4.2 per cent in the June quarter, while some local economists think it could rise further and remain above the top of the target band until 2027.
With the risk that stronger inflation becomes embedded in the economy, markets are now bringing forward the prospect of rate hikes, with investors reportedly pricing the first move as early as July. The New Zealand dollar rose straight after the data, climbing from 58.90 US cents to 59.05 US cents.
Read more over at The NZ Herald and Bloomberg
