A quarterly survey by the Reserve Bank of New Zealand that includes business managers, economic professionals an industry leaders showed that inflation may rise to 2.96% in the last quarter of this year, compared to 2.27% in the second quarter survey, while expectations indicate that inflation will rise to 3.70% at an annual pace. Compared to 3.02% in the third quarter estimates, its highest level in 11 years.
This survey of inflation expectations reflects the global picture of the continuous rise in inflation globally. Accordingly, expectations and speculations have risen that the Reserve Bank of New Zealand will raise interest rates at next week’s meeting by about 25-50 basis points, after it raised them on the sixth of October from 0.25% to 0.50%.
The Reserve Bank of New Zealand targets inflation in the range of 1-3%, but it targets 2% in the medium term. Therefore, the rise in inflation expectations above the target forces the bank to follow the rate hike next week with a series of rapid successive hikes next year.
The New Zealand dollar is trading at 0.7022 levels against the US dollar, with an increase of 32 points before the opening of the European session.