That \u201cpaved the way\u201d for the Reserve Bank to cut the Official Cash Rate in August, said ASB senior economist Mark Smith.<\/p>\n
\u201cThe figures did not change our core view that the increase in annual CPI inflation has further to run,\u201d Smith said.<\/p>\n
\u201cWe still expect annual CPI inflation to move above 3% in the September 2025 year.\u201d<\/p>\n
AdvertisementAdvertise with NZME.<\/a><\/p>\n The 2.7% increase follows a 2.5% annual increase in the 12 months to the March 2025 quarter.<\/p>\n That was the highest annual rate in 12 months.<\/p>\n But the RBNZ would \u201clook through the tick up in near-term overall CPI inflation\u201d as the global and local economy slowed, he said.<\/p>\n \u201cAfter earlier tapping the monetary policy brakes, the RBNZ is expected to press the accelerator and actively provide policy support. We expect the OCR to be cut by 25bps [basis points] in August to 3%.\u201d<\/p>\n The data was a bit softer than the market expected, and so wholesale rates and currency were a bit weaker, BNZ senior market strategist Jason Wong said.<\/p>\n \u201cIt just provides some comfort that the Reserve Bank will probably ease again, probably in August, which is what the consensus was,\u201d Wong said.<\/p>\n The New Zealand dollar and wholesale interest rates edged lower on the better-than-expected data.<\/p>\n After a few minutes trading, the NZ dollar was down 20 pips at US59.45c and key two-year swap rates were down by 3.5 basis points at 3.16%.<\/p>\n The largest upwards contributor to the annual inflation rate was local authority rates and payments, up 12.2%. <\/p>\n Rates contributed 13% of the 2.7% annual increase.<\/p>\n AdvertisementAdvertise with NZME.<\/a><\/p>\n \u201cRates are captured once a year in the September quarter,\u201d Growden said.<\/p>\n \u201cThe 12.2% annual increase for rates was captured in the September 2024 quarter. Next quarter, we will capture changes in rates as of July 1 2025.<\/p>\n \u201dPetrol, down 8% in the 12 months to June 2025, offset the increase in rates.<\/p>\n \u201cPetrol made a significant downward contribution to annual CPI. <\/p>\n \u201cThe CPI excluding petrol increased 3.2% in the 12 months to June 2025.\u201d<\/p>\n The average price for one litre of 91 octane fuel was $2.54 in the June 2025 quarter, down from $2.76 in the June 2024 quarter.<\/p>\n AdvertisementAdvertise with NZME.<\/a><\/p>\n The CPI rose 0.5% in the June 2025 quarter, compared with the March 2025 quarter, which was up 0.9%.<\/p>\n The largest riser in the June quarter was the cultural services category, up 9.5%, (contributing 26% of the 0.5% quarterly rise). <\/p>\n This was driven by subscriptions to streaming services.<\/p>\n Non-tradeable V tradeable <\/p>\n Tradeable inflation, which measures final goods and services that are influenced by foreign markets, rose 1.2% in the year to June.<\/p>\n Non-tradeable inflation, which measures final goods and services that don\u2019t face foreign competition (and is an indicator of domestic demand and supply conditions), rose 3.7%.<\/p>\n