Petrol prices fuel inflation - so is an interest rate rise the right move?
New Zealand's inflation data shows a 0.7 percent quarterly increase, driven largely by rising fuel costs. Economists are debating whether the Reserve Bank should raise interest rates to combat this inflation or hold off to avoid further straining struggling businesses and households.
Why it matters
The decision on interest rates directly impacts the cost of living and borrowing for New Zealand citizens and businesses, serving as a bellwether for global economic policy responses to inflation.
Is now the right time for an interest rate increase?
On Thursday, Stats NZ data showed consumer prices up 0.7 percent in the September quarter and 3.7 percent over a year.
Non-tradeable or domestically influenced, prices were up 3.3 percent, the slowest rate since the start of 2021.
Intentionally influenced prices rose at 4.3 percent. Fuel prices were a big part of that, 19 percent higher than a year ago.
Audio player for " Should you buy a house from your mother-in-law? " removed for printing
Visit page to play audio: https://www.rnz.co.nz/news/eyJhbGciOiJIUzI1NiJ9._f0.YIZs2-J2FpwgcBcJJb29s1vXmFAWHLh_p1oUyv-l-RA/personal-finance/2091129%2Fpetrol-prices-fuel-inflation-so-is-an-interest-rate-rise-the-right-move
Kiwibank chief economist Jarrod Kerr said with fuel price pressure on households and businesses, it was reasonable to ask whether another official cash rate (OCR) increase was likely.
The rate is up for review next week and is expected to increase, probably by 25 basis points.
Get smarter about the news
Sign up free for a feed built around what you actually care about, Dive Deeper research on any story, and the full text of every article.
Create free accountAlready have an account? Sign in