ASB economist Jane Turner says there is no real urgency for the Reserve Bank to lift interest rates, despite a sharp rise in inflation.
The Consumer Price Index rose 2.3% in the final three months of last year, largely driven by a rise in GST and rising petrol prices.
It was the largest quarterly increase, since 1989, when GST last rose.
But Ms Turner says underlying inflation pressures remain contained for now because retailers absorbed some of the GST increase themselves.
She says the Reserve Bank can leave rates on hold until September.
The latest quarterly rise in CPI takes the annual increase to 4% - the highest rate in more than two years.
The Official Cash Rate was raised to 3% on 29 July, 2010. It was previously at 2.5% from 30 April, 2009 - 10 June, 2010, when it was raised to 2.75%.