Inflation has hit rock bottom and prices will start to rise from here on in, an ANZ economist says.
The bank's monthly inflation gauge put price rises in September at just 0.2 percent last month, with official figures for the September quarter out next week.
ANZ chief economist Cameron Bagrie said he predicted prices in the quarter will have risen by just 0.1 or 0.2 percent, compared to a year ago.
Current inflation pressures were "dozy" but there were signs of life, he said.
"It's pretty clear that the New Zealand economy is rippling along at a very fast clip. Generally speaking that is a flag bearer for inflation to be moving up."
A low inflation figure for the September quarter would make it even more likely that the Reserve Bank would cut interest rates in November, he said.
"If they don't cut the New Zealand Dollar [it] is going to be 3 to 4 cents higher and that, of course, means more tradable deflation and even lower inflation in 2017," he said.
Inflation would start rising slowly over the next 12 to 18 months, Mr Bagrie said.