Lack of housing inflation tipped to keep OCR low
Statistics were released today showing a subdued increase in consumer prices in the quarter, taking the annual inflation rate down to its lowest since December 1999.
This was weaker than Westpac’s pick of a 0.6% increase, and the market median and Reserve Bank forecast of 0.5%.
Westpac’s economists said housing inflation had picked up over the past 18 months but that had not had the flow-on effect to the CPI that had been expected.
“The date at which this starts to spill over into more generalised inflation seems more distant after today’s figures. That could in turn mean further delays to interest rate hikes, although we’ll make a decision in the context of a broader review of our forecasts,” the report said.
Click the button below to subscribe and will have free unlimited access for a limited time to full article and all other articles on the site.
You will also be able to comment on articles on Good Returns.
