Food and fuel raise cost of liv­ing

Central Leader - - WHAT’S ON - HAMISH RUTHER­FORD

‘‘It hits the bud­gets of low and mid­dle in­come house­holds hard­est’’

The cost of liv­ing is ris­ing at the fastest rate in more than five years, with inflation jump­ing on the back of higher food and fuel prices.

Sta­tis­tics New Zealand fig­ures showed the con­sumer price in­dex rose by 1 per cent in the first three months of 2017.

An­nual inflation for the year to March 31 climbed to 2.2 per cent, higher than economists were expecting.

If the GST hike was ex­cluded, inflation had not been above 2 per cent since 2009, Sta­tis­tics New Zealand said.

Stronger fruit and veg­etable prices, cou­pled with an in­crease in the price of petrol and the an­nual in­crease in the tax on cig­a­rettes and to­bacco, boosted inflation.

The jump in inflation means the cost of liv­ing is climbing faster than the labour cost in­dex, a mea­sure of the speed at which pay rates are ris­ing across the econ­omy.

Ear­lier this week the Coun­cil of Trade Unions (CTU) warned ris­ing inflation would fea­ture in pay de­mands. CTU econ­o­mist Bill Rosenberg said the in­creases would have a dis­pro­por­tion­ate ef­fect on low in­come house­holds.

‘‘It is con­cen­trated mainly in ne­ces­si­ties that hit the bud­gets of low and mid­dle in­come house­holds hard­est.’’

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