Westpac Still Look For OCR To Hit Peak In May

Ahead of today’s Q1 CPI print Westpac estimate “that New Zealand consumer prices rose by 1.5% in the March quarter.”

• “That would see annual inflation slipping to 6.9%, down from 7.2% at the end of last year. Even so, that would still leave us with a picture of consumer prices that are continuing to charge higher, with annual inflation remaining close to multi-decade highs.”
• “The March quarter saw a massive increase in food prices, as well as continued increases in housing related costs. Those increases have been partially offset by falls in fuel prices.”
• “While there have been large swings in some specific prices, under the surface inflation pressures remain strong and widespread, underpinned by strong demand over the past year.”
• “Our forecast is lower than the RBNZ’s last published projection. A result in line with our estimate would reinforce our expectation for a peak in the OCR after a final hike in May.”