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New Zealand: Inflation ticks up in Q2
Latest reading: Inflation rose to 2.7% in Q2 2025 from 2.5% in Q1, slightly below market expectations and within the Central Bank’s 1.0%–3.0% target band. As in the prior quarter, large contributors to Q2’s year-on-year increase in prices were housing rents and local authority rates, with higher electricity prices also playing an important role. Core inflation dipped to 2.4% from 2.5%.
Meanwhile, consumer prices rose 0.5% from the previous quarter in Q2, coming in below Q1’s 0.9% rise.
Panelist insight: On the monetary policy implications, ANZ analysts said:
“While [the] data cannot be characterised as comfortable, it doesn’t present a roadblock to further OCR cuts. Indeed, a little less near-term inflation strength than we thought was likely means the RBNZ can feel a bit more confident putting weight on the broad-based deterioration in the high-frequency data we’ve seen of late (e.g. PMI, PSI, housing, filled jobs, etc). We continue to pencil in OCR cuts for August, November and February.”
