Supply and demand in the New Zealand economy are back in balance and prices are behaving more normally, despite slow progress in domestic services inflation. Our output gap is pretty much zero and we're pretty much around what we used to call maximum sustainable employment in the labour market,” he said on Friday. However, core inflation in the United Kingdom remains uncomfortably high at 4%, while its services inflation was just under 6%. Statistics NZ’s measure of core inflation shows an annual rate of about 4.5% in the most recent release and RBNZ’s flagship core measure puts it at 4.3%. RBNZ Governor Adrian Orr said the inflation pressures were concentrated in the short-term and sectors less affected by interest rates.
