Annual inflation continues to run low, suggesting there’s still some capacity in the economy that will help the Reserve Bank keep interest rates at record lows well into next year, writes Thomas Coughlan.
Annual inflation is still running low at 1.5 percent, according to CPI data released by Statistics NZ this morning.
Weak levels of inflation expected to be revealed in new data are an indication of missed economic growth, an economist says. Thomas Coughlan reports.
The effects of inflation have been much heavier in the last decade for poorer consumers than rich ones. That's because tax and policy moves have effectively been regressive, including increases in GST, fuel and cigarette taxes, along with falling prices for goods and services used more by richer consumers.
Annual inflation stood at just 1.1 percent according to data released by Stats NZ on Wednesday, but economists predict that number will rise as tightness in the Labour market fuels wage increases. Thomas Coughlan reports.
The consumers price index (CPI) rose 0.5 percent in the March 2018 quarter, Stats NZ announced today. This is in line with the market expectations, but slightly above those of most bank economists here.
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New Finance Minister Grant Robertson faces a tough time convincing existing Reserve Bank staff that they can run the economy hotter to get unemployment below four percent, at least for now.
Yet again, inflation is failing to fire this year and interest rates are staying lower for longer. Bernard Hickey looks at why prices, wages and interest rates just won't, or can't, get up off the floor.
Inflation was surprisingly weak in the June quarter, which means financial markets and economists now see the Reserve Bank as more likely to keep the Official Cash Rate on hold for longer.