New Zealand Confidence Boosted, But Inflation Fears Persist

New Zealand's consumer confidence index rebounded in July, rising by 8 points to 99.3 according to the ANZ-Roy Morgan survey.

This marks a significant improvement from April's low but still falls short of January's peak of 107.1.

The bigger concern is inflation expectations, which remain steady at 4.6%. This persistent expectation of rapid price increases can lead to higher wage demands and businesses' pricing power, making it harder for the Reserve Bank of New Zealand to cool inflation.

Household spending on big-ticket items such as appliances, furniture, and cars remains cautious, with a net share of 7% saying it's not a good time to buy. Higher interest rates are likely contributing to this hesitation, as higher monthly repayments can be a significant burden for households.