So, annual growth in the consumer price index has fallen from 5.1% to 3.4%. A sharp decline in petrol prices appears to have been the main driver of this drop off in annual price growth.
However, what about “inflation”. Annual non-tradable growth increased to 4.3% – the highest level since late-2005. If I wasn’t now expecting New Zealand economic activity to plummet in March (given poor consumer and business sentiment and temporarily lower trade incomes – note, these are temporary shocks 😉 ) I would be highly concerned about rate cuts.