New Zealand poised to act as inflation hits 30-year high

NEW Zealand’s inflation rate has surged to its highest in more than three decades, in a fresh blow for Jacinda Ardern, the prime minister.

The consumer prices index hit 7.3pc in the second quarter – up from 6.9pc in the first three months of the year and the fastest rate of inflation since 1990.

Rising fuel, food and housing costs were the biggest driving force behind the price rises.

The figures are the latest setback for Ms Ardern, who is already facing criticism for the economic damage wreaked by her zero-covid strategy.

They will also fuel expectations of further interest rate rises when the Reserve Bank of New Zealand meets in August. Earlier this month, the central bank raised its benchmark interest rate to its highest level in six years and warned further rises could follow.

Most economists now expect the Bank to raise rates by 50 basis points next month, but the sharp rise in inflation will fuel speculation that it could follow global peers in delivering an even bigger increase.