Inflation hits 5.1pc - highest in 18 years
Page 1 of 2 .... 12:10PM Tuesday Oct 21, 2008

Annual inflation hit an 18-year high of 5.1 per cent in the September quarter, pushed up by petrol, housing and electricity costs.

Releasing the data today, Statistics New Zealand (SNZ) said that for the three months to the end of September the consumers price index (CPI) was up 1.5 per cent, with petrol again a key factor.

Other major contributors to the third quarter increase included food and rates.

The latest figures are bang on economists' expectations, and follow a rise of 1.6 per cent in the June quarter, which took the annual inflation rate at that time to 4 per cent.

The CPI rise is well above the Reserve Bank's target of 1-3 per cent over the medium term.

But a sharp decline in world financial markets, triggering falls in commodity and energy prices, while raising fears of global recession, are expected to help bring inflation down.

ASB chief economist Nick Tuffley said that "underlying momentum in inflation has yet to show signs of softening. In more normal times the underlying picture would cause the RBNZ a lot of discomfort."

More here.