Below is economist Tony Alexander’s analysis of this week’s shock New Zealand inflation result, which saw inflation rise by 7.2% in the year to September – much higher than any market forecasts. Alexander believes the Reserve Bank of New Zealand (RBNZ) will respond with further aggressive interest rate hikes, which will send mortgage rates higher. _____________________________________________________________________________________________Everyone in the markets on Tuesday morning was primed for the annual inflation rate in the September quarter falling from the June quarter 7.3% down to something near 6.3% – 6.6%. The shock inflation result says that there is more work for the Reserve Bank to do and that means the official cash rate looks set to go higher than thought previously. We can probably lock in a 0.75% rise come the review on November 23 plus some more warning words from the Reserve Bank.

Source: Stuff October 21, 2022 17:46 UTC