Consumer prices rose by 7.2% over the past year, and food price inflation hit a 14 year high of 10% in October. The elevated level of inflation expectations is a big worry for the RBNZ. Compounding the challenges for the RBNZ is that once inflation expectations do rise, it can be difficult to pull them down again. However, inflation pressures are now increasingly related to domestic factors, particularly the pressures in the labour market. That has only taken them back to where they were in April last year, highlighting the ferocity of the price rise over 2020 and 2021.

Source: Stuff November 14, 2022 05:24 UTC