Consumer prices rose 1.3 percent from the second quarter, Statistics New Zealand said. Prices gained 1.7 percent from a year earlier.
Bollard said last month he expected to keep the benchmark interest rate at a record-low 2.5 percent until late 2010 because the economy needed further stimulus to recover from its worst recession in three decades. New Zealand’s dollar rose to near a 14-month high as traders bet the central bank will raise borrowing costs earlier as the economic recovery gathers pace.
House prices rose 1.9 percent in September from August, the Real Estate Institute said yesterday. Consumer confidence rose to a four-year high in the third quarter, Westpac said in a report last month. Business confidence surged to a 10-year high in September, according to a survey by ANZ National Bank Ltd.
The central bank is required to keep annual inflation between 1 percent and 3 percent on average. At 1.7 percent, annual inflation is the lowest since the first quarter of 2004, today’s report showed.
Annual inflation slowed from 1.9 percent in the year to June because third-quarter inflation was less than the 1.5 percent pace in the year-earlier quarter.
Bollard expects annual inflation will be at or below 2 percent until early 2011, according to forecasts in last month’s monetary policy statement. He predicted consumer prices rose 0.9 percent in the third quarter.
Bollard’s primary focus is on non-tradable inflation, a core measure of prices that are not influenced by currency fluctuations and fuel.
Non-tradable prices rose 1 percent from the second quarter, today’s report showed. The measure gained 3 percent from a year earlier, the smallest gain in more than seven years.
Non-tradable inflation was led by a gain in vehicle licensing charges, local land taxes and beer prices, the statistics agency said.