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RNZ

Cost of living crisis: Inflation hits 32-year high at 7.3 percent

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Inflation has hit 7.3 percent - its highest since June 1990

Consumer prices rose 1.7 percent in the three months ended June, above expectations, driven by more expensive fuel, food and housing costs.

That pushed the annual rate to 7.3 percent, the highest since June 1990.

The increase cements a further hefty rate rise by the Reserve Bank next month.

Economists were forecasting the annual rate would exceed 7 percent.

The official numbers from Stats NZ were expected to show rising fuel prices, more expensive food, and higher building and household costs, driving the consumer price index up about 1.5 percent for the three months ended June.

Earlier, ANZ's chief economist Sharon Zollner told RNZ's Morning Report there was a risk prices could go even higher, after a surprise with inflation figures in the US last week.

She said where price rises were happening was making it hard going for consumers right now - but they were continuing to spend.

Zollner said the question was how high interest rates would need to go to cool down that spending.

Transport Minister Michael Wood said the Government could take some of the pressure off prices - but not change the international factors that he said were driving inflation.

The Government yesterday extended measures on fuel tax and public transport until next January.

Wood said everyone was feeling the pressure of fuel costs and the Government was carefully monitoring to see that supplier profit margins were not widening.

National Party deputy leader Nicola Willis said allowing in more immigrants would help stem rising inflation.

She also told Morning Report the Government should be doing more to tackle the domestic drivers of inflation, including limiting its own spending.

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