WELLINGTON (Reuters) - New Zealand's inflation rate is expected to have held steady in the fourth quarter, surpassing central bank expectations but still unlikely to undermine its determination to keep rates on hold at record lows.
Ten economists polled by Reuters expected the consumer price index (CPI) to rise an average of 0.4 percent in the three months ending December. The figures will be released by Statistics New Zealand on Thursday.
That would result in annual inflation of 1.9 percent, unchanged from the previous quarter and a touch higher than the 1.8 percent predicted by the Reserve Bank of New Zealand (RBNZ) in November.
Higher fuel prices and the usual surge in housing-related costs would underpin inflation, but economists said gains would be largely limited to those factors.
"Outside of housing, evidence of a lift in domestic inflation pressure will be tentative at best," said Phil Borkin, senior economist at ANZ Bank.
A housing shortage has pushed up rents in recent years while a dearth of skilled labour has seen the cost of residential construction soar.
Meanwhile, a global rise in oil prices had caused petrol prices to jump 6 percent during the quarter to a three-year high, economists said.
"This firming is not broad-based but is confined to a few pockets of the economy where capacity pressures are particularly intense," ASB economists wrote in a research note.
"We will continue to expect the RBNZ to hold off raising the official cash rate."
The bank has signalled it will keep interest rates at a record low of 1.75 percent until the end of 2019 to support the recovery of previously tepid inflation.
The RBNZ will take the fourth-quarter inflation data into account at its next monetary policy decision on Feb. 8.
Thursday's data release will be the first to incorporate Statistics New Zealand's new three-yearly update to weightings and items in the CPI basket.
Economists said the basket changes were unlikely to have a major impact on the final figure, but could be a slight drag on the growth outcome.
The statistics agency's higher weighting on food prices, which had fallen 1.6 percent in the fourth quarter, would magnify that category's impact in particular, ANZ's Borkin said.
(Reporting by Charlotte Greenfield; Editing by Eric Meijer)
