NZ's inflation on track to return above 1% by early next year

The 0.3% rise in NZ's consumer prices over the September quarter was in line with the Reserve Bank's assessment, but a touch higher than the median market forecast of 0.2%.  

The rise in prices was entirely on tradable goods and services, as the lower New Zealand dollar gradually filters through into higher retail prices. Annual inflation remains very low for now at just 0.4%, partly due to factors that will wash out over time, such as cuts to government charges and the sharp fall in fuel prices early this year. 

"Today's figures support the view that inflation is on track to return above 1% by early next year. However, a sustained return to the 2% midpoint of the RBNZ's target band remains a daunting challenge - even more so now that the New Zealand dollar has reversed more than a third of its decline", says Westpac.