20 Oct 2014

Subdued inflation figures expected

8:42 am on 20 October 2014

Economists are expecting the September quarter inflation figures due this week will undershoot the Reserve Bank's 0.7 percent forecast.

That is mainly because of unusually low food prices this winter and generally subdued inflation, except in the housing-related areas and utilities, such as electricity.

ASB Bank is expecting a 0.5 percent rise for the three months ended September, taking the annual inflation rate to 1.1 percent, just above the bottom of the central bank's 1 to 3 percent target range.

ASB chief economist Nick Tuffley said this is the time of year when there tend to be relatively large increases in some items, particularly in food over the winter months when out of season vegetables are relatively expensive.

However, Mr Tuffley said the expected 0.5 percent increase is relatively mild, primarily because food prices did not go up as much as they normally would.

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