Latest News
Consumer prices up 1.2 percent, annual inflation rate falls to 6.7 percent
Inflation has surprisingly fallen to its lowest level in more than a year, but domestic pressures are now the dominant factor and likely to ensure interest rates stay high for a prolonged period.
Stats NZ said consumer prices rose 1.2 percent for the three months ended March, with the annual rate falling to 6.7 percent from 7.2 percent, well below forecasts.
The main drivers continued to be household costs, such as rents, rates and maintenance, food prices, and building costs.
Food costs were the main component of the annual rise, increasing 11.3 percent on the back of more expensive fresh fruit and vegetables, groceries and takeaway/restaurant meals.
Food costs were the main component of the annual rise, increasing 11.3 percent on the back of more expensive fresh fruit and vegetables, groceries, takeaways and restaurant meals. Photo: RNZ / Richard Tindiller
“Inflation is still at levels not seen since the 1990s,” Stats NZ consumer prices senior manager Nicola Growden said.
The key offset for the annual rate was was an 8.3 percent fall in petrol prices.
However, domestically generated price pressures, known as non-tradable inflation, are now the main driver of the overall rate, rising 6.8 percent for the year from 6.4 percent.
International or tradable inflation has eased to a 6.4 percent annual increase from 8.2 percent on the back of softer lower energy, commodity, and supply chain costs.
“Annual inflation remains painfully high. However, inflation looks like it has now peaked. Core inflation, while still high, is not pushing higher,” Westpac senior economist Satish Ranchhod said.
“Interest rates have been on the rise for over 18 months. Although price pressures still remain very strong, we’re now seeing signs that the rise in prices is starting to lose some steam.”
An 8.3 percent fall in petrol prices helped offset the rise in food and housing costs in the annual inflation rate. Photo: RNZ / Dan Cook
ASB senior economist Mark Smith said there were still inflation risks lurking, such as the impact of the floods and Cyclone Gabrielle, and core or underlying measures of inflation were still stubbornly high at close to 6 percent.
“The more persistent and policy relevant domestic and core inflation measures have showed few signs of slippage and remain well above the 1-3 percent inflation target band.”
He expected a 25 basis point rise for the official cash rate to 5.5 percent next month, and then the RBNZ headed to the sidelines for a prolonged period.
“Today’s CPI report suggests that past OCR hikes are gaining traction. OCR cuts will only be contemplated when sub 3 percent CPI inflation is in prospect, but this is unlikely to be seriously considered until well into 2024,” Smith said.
The New Zealand dollar fell nearly half a cent against the US dollar to 61.5 US cents as investors bet on the prospects of rate cuts sooner than signalled.
The previous Consumers Price Index released in January showed prices rose 1.4 percent for the three months ended December, an annual inflation rate of 7.2 percent. The rising cost of living has already caused many New Zealanders to experien
The chief executive of the Parliamentary Service is confident there will be enough room to accommodate the increased number of MPs and their staff coming into Parliament.
On current numbers, up to 131 MPs could be sitting in the Chamber following the election, brought on by a record overhang result.
Clerk of the House of Representatives Dr David Wilson told the Spinoff that currently the debating chamber had enough chairs to seat 124 MPs – including the Speaker of the House – and work was being done to accommodate more by altering the seating arrangement.
In a statement, Parliamentary Service chief executive Rafael Gonzalez-Montero said planning for a larger Parliament had been going for “some time”.
“Now that the election results have confirmed an increase to the number of members we are looking at several options.
“We are confident we will be able to accommodate all members within the Chamber.”
VNP / Phil Smith
Gonzalez-Montero said office accommodation for members and their staff would be “stretched” for a short time, but the new Members’ Building was only a few months away from “practical completion”.
That building – located behind Parliament – was due to be ready to occupy in April next year and had capacity to accommodate around 30 backbench MPs.
“All members should be in fit-for-purpose accommodation from that point,” Gonzalez-Montero said.
Following the 2023 election, 123 MPs sat in the Chamber – a record number at the time. That decreased to 122 following the resignation of National MP Judith Collins.
Collins held the seat of Papakura and stepped down in May and Parliament voted against holding a by-election because it was too close to the election.
The election result also meant high-ranking National Party MPs like Chris Bishop, Paul Goldsmith, Nicola Willis and Gerry Brownlee – Speaker of the House and an MP for 30 years – would likely not make it back into Parliament.
Only resigning or retiring MPs were permitted to give a valedictory speech meaning none of them would get the chance to give a valedictory statement.
Asked if their would be special allowances for valedictories, Wilson said in a statement that normally only MPs were allowed to speak in the House but the House could suspend its own rules or temporarily alter them.
“It could do so to allow former members to address the House.”
Wilson said no such arrangements could be made until the next Parliament opened and members sworn in.
rnz
Police say person who fired gun at officers still at large
New Zealand sides named for RLWC finals
Parliamentary Service working on extra chairs and offices for increased number of MPs
-
Latest News2 months ago‘Chilling’: Business groups speak out against National’s supermarket break-up plan
-
NZ News2 months agoTom Phillips report: The missed opportunities to find the children
-
Latest News2 months agoCars bearing Chinese police markings stir unease in Auckland
-
Politics2 months agoNational vows to try to split Pak’nSave and New World
-
Fiji News2 months agoPlans to have new Constitution by Dec 24th 2026
-
Politics2 months agoMBIE confirms botched biometric projects costs blown out to $50.7 million
-
NZ News2 months agoCop who stole $68,000 can now be named as champion Muay Thai fighter Haimona Tamati-Te Paki
-
Latest News2 months agoFive Karangahape Road venues lose their liquor licences after police intervention