Food and fuel raise cost of living
‘‘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.’’