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15h ago

New Zealand Inflation Hits 3% as Power and Rents Drive Q3 Jump

The result puts pressure on an RBNZ that recently cut the cash rate to 2.5%.

A general view of the Auckland skyline at sunset REUTERS/Molly Darlington

Overview

  • The consumer price index rose 1.0% in the third quarter, lifting the annual rate to 3.0%, the top of the Reserve Bank of New Zealand’s target band.
  • Statistics New Zealand cited higher electricity charges, rising rents, and local government tax increases as the main contributors to the quarterly rise.
  • Annual electricity price increases are the largest since the late 1980s, according to Statistics New Zealand spokesperson Nicola Growden.
  • Annual non-tradeable inflation eased to 3.5% from 3.7% in the second quarter, indicating some cooling in domestically driven pressures.
  • The RBNZ had projected a 3% annual rate for the quarter and cut rates by 50 basis points to 2.5% while signaling an outlook for inflation to move toward 2% by mid-2026, with analysts noting external risks from U.S. tariff policy and geopolitical tensions.