Inflation leaps to 6.9%, largest movement since June 1990

Source: 1News

Inflation has hit 6.9%, the largest movement since June 1990.

The figures were released on Thursday by Stats NZ.

Construction and house rentals were driving the housing and household utilities group, the main driver of the increase to the March 2022 quarter.

“Construction firms have been experiencing many supply-chain issues, higher labour costs, and also higher demand, which have pushed up the cost of building a new house,” senior prices manager Aaron Beck said.

Higher petrol and second-hand car prices were also driving inflation - with petrol prices up 32% in the year to the March 2022 quarter.

The Reserve Bank (RBNZ) earlier this month stepped up the battle against inflation with an increase of half of a percentage point in the Official Cash Rate (OCR) to 1.5%, with a warning that further rises are coming.

Food prices were 7.6% higher in March than the year before - the biggest annual increase in more than a decade.

File picture.

The inflation figures at the end of January saw the consumer price index - which measures the cost of goods - hit 5.9%.

Finance Minister Grant Robertson said earlier this week inflation was impacting many countries.

It was driven by supply chain constraints, the impacts of Covid-19 and the war in Ukraine.