That pressure is being driven largely by global commodity markets and looks “more persistent”, even if it can be disinflationary over time as it squeezes discretionary spending.
There was also a headline‑grabbing move in confectionery: the price of a block of chocolate is up 20% on a year ago, with a 5% monthly rise in sweets in the lead‑up to Valentine’s Day.
Rents flat, energy pressures easing
The friendlier news for mortgage advisers is on housing‑related costs. Average rents were flat in January – the first time since 2007 they haven’t risen in a January – with annual rental inflation near record lows.
ASB‘s Wesley Tanuvasa, economist, and Mark Smith, senior economist (pictured, center to right), “rental inflation has remained dormant,” reflecting low population growth and a strong supply response from higher‑density building.
Energy‑related inflation is also easing. ASB estimates household electricity and gas prices rose just 0.3% in January, with annual household energy inflation slowing to 11.9% from 13%. Petrol prices fell 2.4% over the month.