15 Jul 2008

CPI expected to rise

10:26 am on 15 July 2008

The latest Consumers Price Index, due on Tuesday, is expected to show the cost of living in New Zealand is still rising.

Retail figures fell sharply in May, but the higher price of fuel and supermarket items propped up the overall levels of consumer spending.

UBS Investment Bank senior economist, Robin Clements says that indicates the economy is in recession.

But he says the retail figures are not likely to affect the Reserve Bank's next review of the Official Cash Rate, later this month.

He says the bank may decide to wait until September to change the OCR, which is currently 8.25%. It was set in July last year.