Video | Agriculture | Confidence | Economy | Energy | Employment | Finance | Media | Property | RBNZ | Science | SOEs | Tax | Technology | Telecoms | Tourism | Transport | Search

 


NZ food prices fall in July, cementing expectations on rates

NZ food prices fall in July, cementing expectations interest rates are on hold till 2015

By Tina Morrison

Aug. 27 (BusinessDesk) - New Zealand food prices declined in July, adding weight to speculation that softer inflation will prompt the Reserve Bank to keep the benchmark interest rate on hold until next year.

The food price index fell 0.7 percent from June, its first decline in four months, as discounting led to lower prices for beef and processed meat, Statistics New Zealand said. The index was 0.1 percent lower than July last year, the first annual decline in 14 months, led by lower prices for fruit and vegetables, the agency said.

Food prices are one of the components eyed by economists as they evaluate the pace of inflation, as they make up about 19 percent of the broader consumer price index compiled by Statistics New Zealand. Weaker inflation means the Reserve Bank may hold off raising the official cash rate again until next year, analysts said.

"The result adds to recent inflation indicators pointing to a subdued inflation environment for now," ASB Bank economist Christina Leung said in a note. "With the Reserve Bank already having put through 100 basis points of OCR increases this year, we expect it will now pause until next March to assess the effects of the tightening it has done to date."

The Reserve Bank will probably increase the benchmark rate four times next year, with interest rates peaking at 4.5 percent at the end of next year, Leung said.

July food prices fell from June as fruit and vegetable prices slipped 0.9 percent; meat, poultry and fish prices slid 2.2 percent; and grocery food prices declined 0.7 percent, the statistics agency said. Meanwhile, non-alcoholic beverage prices rose 0.2 percent and restaurant and takeaway food prices remained unchanged, it said.

Compared with July a year earlier, fruit and vegetable prices were the only subgroup to record a decline, sliding 5.9 percent, Statistics New Zealand said. Meantime, meat, poultry and fish prices increased 0.5 percent; grocery food prices rose 0.2 percent; non-alcoholic beverage prices gained 1.5 percent; and restaurant and takeaway food prices advanced 2.2 percent, it said.

(BusinessDesk)

© Scoop Media

 
 
 
 
 
Business Headlines | Sci-Tech Headlines

 

Economic Update: RBNZ Says Rate Cut Seems Likely

The Reserve Bank will likely cut interest rates further as a persistently strong kiwi dollar makes it difficult for the bank to meet its inflation target, it said. The local currency fell. More>>

ALSO:

House Price Action Plan: RBNZ Signals National Lending Restrictions

The central bank wants to cap bank lending to property investors with a deposit of less than 40 percent at 5 percent and restore the 10 percent limit for owner-occupiers wanting to take out a mortgage with a deposit of less than 20 percent, according to a consultation paper released today. More>>

ALSO:

Sparks Fly: Gordon Campbell On China Steel Dumping Allegations

No doubt, officials on the China desk at MFAT have prided themselves on fashioning a niche position for New Zealand right in between the US and China – and leveraging off both of them! Well, as the Aussies would say, of MFAT: tell ‘em they’re dreaming. More>>

ALSO:

Loan Sharks: Finance Companies Found Guilty Of Breaching Fair Trading Act

Finance companies Budget Loans and Evolution Finance, run by former 1980s corporate high-flyer Allan Hawkins, have been found guilty of 106 charges of breaching the Fair Trading Act for misleading 21 borrowers while enforcing loan contracts. More>>

ALSO:

Post Panama Papers: Govt To Adopt Shewan's Foreign Trust Recommendations

The government will adopt all of the recommendations from former PwC chairman John Shewan to increase disclosure and introduce a register for foreign trusts with new legislation to be introduced next month. More>>

ALSO:

The Price Of Cheese: Cheddar At Eight-Year Low

Food prices decreased 0.5 percent in the year to June 2016, influenced by lower grocery food prices (down 2.3 percent), Statistics New Zealand said today. Compared with June 2015, cheese prices were down 9.5 percent, fresh milk was down 3.9 percent, and yoghurt was down 9.2 percent. More>>

ALSO:

Financial Advisers: New 'Customer-First' Obligations

Goldsmith plans to do away with the current adviser designations which he says have been "unsatisfactory" in that some advisers are obliged to disclose potential conflicts of interest and act in their customers' best interests, but others are not. More>>

ALSO:

Get More From Scoop

 
 
 
 
 
 
 
 
 
Business
Search Scoop  
 
 
Powered by Vodafone
NZ independent news