New Zealand's annual consumer inflation rose slightly above the Reserve Bank of New Zealand's forecast in the June quarter, as the global oil shock continued to weigh on consumers.
Annual consumer inflation increased 4.1% in the June quarter, above the central bank's forecast of 3.9% and up from the 3.1% increase recorded in the March quarter.
According to Prices and Deflators spokesperson Nicola Growden, higher petrol prices accounted for almost a quarter of the 4.1% annual increase, with petrol prices rising more than 20% during the quarter.
Diesel prices also climbed about 48% during the quarter and, together with petrol, accounted for almost two-thirds of the 1.5% quarterly increase in inflation.
Westpac said the uptick was in line with its expectations and forecast headline inflation would remain above 3% through the latter part of the year, raising the prospect of further interest rate hikes at upcoming RBNZ meetings in September and December.
ANZ said the inflation data was unlikely to shift the central bank from its current policy stance, as it continues to expect 25-basis-point rate hikes at the September and October meetings.
The RBNZ, which targets annual inflation within a 1% to 3% range, raised interest rates by 25 basis points earlier this month but said the 2.5% cash rate remained stimulatory and that it intends to continue withdrawing monetary stimulus.
