WELLINGTON – New Zealand’s consumer price index (CPI) rose at the fastest pace in about a decade in the second quarter, sending the dollar higher and cementing the view that the central bank may tighten monetary policy as early as next month.
The inflation figures come after the Reserve Bank of New Zealand (RBNZ) announced a halt to its quantitative easing program earlier this week due to a surprise rebound in business confidence, a sharp rise in inflationary pressures and a tight labor market.
CPI rose a higher than expected 1.3 percent in the quarter ending June from 0.8 percent in the first quarter, according to data released by Statistics New Zealand on Friday, taking annual inflation to 3.3 percent, the highest since June 2011 and past the RBNZ’s target inflation band of 1 percent-3 percent.
The increase was driven by higher prices for new housing, food and petrol, Statistics New Zealand said in a statement, but part of it was attributable to the fact that it is measured against the June 2020 quarter, a period impacted by the COVID-19 lockdown.
