New Zealand Q3 inflation picks up, driven by rising housing costs

New Zealand Q3 inflation picks up, driven by rising housing costs
* CPI rises 0.5 pct in Q3
* Annual rise of 1.9 pct
* Data beats expectations, NZ dollar rallies

(Recasts, adds market reaction)
WELLINGTON, Oct 17 (Reuters) - New Zealand's consumer price
index (CPI) jumped 0.5 percent in the third quarter, surpassing
expectations on the back of rising housing costs, official data
showed on Tuesday.
The CPI grew 1.9 percent on an annual basis, according to
figures from Statistics New Zealand, beating analysts'
expectations for a 1.8 percent rise.
Analysts had been expecting the CPI to increase 0.4 percent
in the three months to the end of September, after being flat
the previous quarter.
The announcement sent the New Zealand dollar to a
two-week high of $0.7197, up from around $0.7178 before the
release. The currency then gave up some of its gains, settling
around $0.7190.
The annual price growth was well above the 1.6 percent
predicted by the Reserve Bank of New Zealand (RBNZ) in August.
However, analysts had said the bank was unlikely to waiver
from its determination to keep interest rates at record lows for
years while the bank waited for previously-tepid inflation to
stabilise around 2 percent.
"Collectively, housing-related costs had the largest upward
contribution in the September 2017 quarter, slightly offset by
falls in transport prices," the country's statistics agency said
in a statement.
Rents rose 2.2 percent compared to the same period the
previous year, while construction of new homes soared 5.3
New Zealand's booming population, stoked by record net
migration, has created strong demand for housing in the past few

(Reporting by Charlotte Greenfield; Editing by Jonathan Oatis)

2017-10-17 00:18:20

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