Inflation Hits 4.1%, Interest Rates Set for Further Hike

The latest consumer price index from Stats NZ shows New Zealand's inflation rate has risen to 4.1% in Q2, driven partly by petrol prices, which accounted for a quarter of the annual rise.

The headline rate is well above the 1-3% target band over the medium term and the highest since 4.7% in Q4 2023, although it was close to what most commentators had been expecting.

While there isn't yet clear evidence of second-round price pressures emerging apart from fuel, the Reserve Bank may still push the Official Cash Rate back up to neutral in the coming months.