Prices keeping inflation lower than expected

Last updated 12:08 16/07/2014

Related Links

$3.8b farming pay cut possible as dairy price dives

Relevant offers

Money

IRD mortgages for the elderly, and other things Gareth Morgan has planned Holy KiwiSaver Batman! Plan to grow KiwiSaver told through superhero doll clips Deep dive into Retirement Commissioner's seven point plan for KiwiSaver Counterfeit $100 notes prompt police warning in South Taranaki Majority support for six of eight options to change KiwiSaver Consumer credit: the best way to borrow money and pay off debt Blowing Bubbles: Who loses the most when a housing bubble bursts Warning Christmas could increase 'mind-blowing' $3500 per capita personal debts Blowing Bubbles: How long until the bubble bursts? Blowing Bubbles: What will the end of the housing market boom look like?

Rising power and building costs are adding to consumer pressure, but overall inflation is lower than expected, according to figures released today.

The consumers price index rose 1.6 per cent for the year to June, barely changed from the March year, and it was up just 0.3 per cent in the June 2014 quarter, Statistics New Zealand said.

Bank economists had been expecting a quarterly rise of between 0.4 per cent to 0.5 per cent, which would have taken annual inflation close to 2 per cent.

"Higher housing-related prices and vegetable prices were partly countered by cheaper package holidays, cars, and fruit," Statistics NZ prices manager Chris Pike said.

Prices for housing and household utilities rose 1.2 per cent reflecting higher prices for electricity (up 4.2 per cent), rents (up 0.6 per cent), and buying newly built houses excluding land (up 1.2 per cent).

Food prices rose 0.9 per cent, influenced by higher prices for fruit and vegetables (up 4.9 per cent). Seasonally higher prices for vegetables (up 13 per cent) were partly offset by seasonally lower prices for fruit (down 4.9 per cent).

Package-holiday prices were down 6.5 per cent and there were seasonally lower prices for accommodation services (down 4.5 per cent).

Vehicle prices were down 1.2 per cent, reflecting a 1.5 per cent fall in second-hand car prices.

Annual inflation was 1.6 per cent, compared with 1.5 per cent in the year to March. Inflation remains well below the Reserve Bank's 2 per cent mid-point of its target range. 

Ad Feedback

- Stuff

Special offers

Featured Promotions

Sponsored Content