Consumer Price Index rose 3.7% in the year to September, down from 4.1% annual growth in June. Infometrics Principal Economist Brad Olsen expects the Reserve Bank to raise the Official Cash Rate by 25 basis points next week, with heavy pressure on the bank to do so to bring inflation back down.
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Related tickers and likely impact
NZD/USD
• NeutralRelevance: low
| Market | Currencies |
|---|---|
| Close on 10/21/2026 | 0.57007 |
| Change that session | +0.29% |
Impact is scored by AI from the headline and may be wrong. It is not investment advice.
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New Zealand's annual inflation came in at 3.7%, a tick below expectations but still above the central bank's target band and down from 4.1% in the year to June, with fuel costs the main driver as petrol rose 19% in the year to September. Because inflation has been outside the target band for a year, the Reserve Bank has already raised rates twice in six months, and a third 25 basis point hike was seen as 75% likely at its October 28 meeting. The data arrives during the campaign before the November 7 election, and in the NZ Herald's Mood of the Boardroom survey, Prime Minister Chris Luxon was preferred as PM by 65% of respondents, beating Chris Hipkins.
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New Zealand's annual inflation came in at 3.7% in the year to the September quarter, a little below forecasts but still too high, making a Reserve Bank (RBNZ) rate rise a matter of when rather than if. Petrol was the main driver, up 19% in the year to September, with the average unleaded price at NZ$3.56 a litre according to Gaspy. Inflation has been outside the target band for a year and the RBNZ has raised rates twice in the past six months, with the official cash rate now at 2.75%; a 25 basis point hike at the October 28 meeting was considered 75% likely. ASB senior economist Mark Smith expects 25bp hikes in October and December, taking the OCR to a 3.25% peak. The result is bittersweet for the National party and its governing coalition, as voting is underway for the November 7 election and cost of living remains a key issue.
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