NZ CPI Preview: Pouring fuel on the fire – ANZ
Analysts at Australia and New Zealand Banking Group (ANZ) offered a sneak peek at what they expect from New Zealand’s Consumer Price Index (CPI) inflation data due next Tuesday.
Key quotes
“We expect annual CPI inflation reaccelerated to 6.1% y/y in Q3, slightly above the RBNZ’s August MPS forecast of 6.0% y/y.”
“Specific drivers include the end of the fuel excise, road-user charges and public transport subsidies (which together add roughly 0.6%pts to the headline), sharply higher oil prices (which have also lifted fuel prices), and a big jump in local authority rates bills.”
“Our assessment is that overall, the CPI report will reinforce questions around whether an OCR of 5.50% is going to prove sufficient to get sticky domestic inflation down within an appropriate timeframe. But at this stage, whether the RBNZ will feel sufficient urgency to hike in November or whether they will feel they can wait for more evidence (with the next decision being in February) is hard to pick.”
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