Consumer prices rose 1.2 percent from the third quarter when they increased 0.5 percent, Statistics New Zealand said today in Wellington.
Bollard, who is required to maintain annual consumer price increases between 1 percent and 3 percent, said last month rising gasoline and food costs may keep inflation above his target until mid-2009. He is unlikely to cut the official cash rate from a record 8.25 percent anytime soon, according to economists surveyed by Bloomberg News.
Bollard, who expected prices rose 1.1 percent in the quarter, focuses on non-tradable inflation, a core measure of prices of goods that are not influenced by currency fluctuations and fuel, said Goh.
Non-tradable prices rose 0.7 percent in the fourth quarter, and gained 3.5 percent from a year earlier. The annual pace slowed from 3.7 percent in the third quarter and was less than the 3.9 percent expected by economists.
The prices of tradable goods, which are imports or those in competition with foreign goods or services, rose 1.8 percent in the quarter and 2.8 percent from a year earlier. Excluding gasoline, tradables prices gained 1.2 percent in the quarter.
Fuel and food prices and the cost of international air travel made the biggest contributions to fourth-quarter inflation. Gasoline prices rose 5.4 percent. Excluding gasoline, consumer prices gained 1 percent, the agency said. Food prices rose 1.5 percent led by meat and dairy. Butter prices surged 41 percent.
Prices of international air travel increased 12 percent. Used- car, overseas packaged holidays, electricity and natural gas prices also rose. The cost of buying and building a new house gained 1.3 percent.