In very brief:
- Domestic inflation pressures continue to surge – necessitating further interest rate rises by the RBNZ to protect Kiwis’ purchasing power.
- Core inflation measures rose again in Q4, up between 3.8% and 5.4% y/y in the year to December 2021. It’s yet another sign that inflation has well and truly moved beyond the “transitory” label that was being applied to it over early 2021. Inflation has some serious momentum.
- Inflation pressures remain broad-based
For the RBNZ:
- Today’s data reinforces our call last week that the OCR will need to be lifted from its current 0.75%, all the way to 3% in April 2023.
