Inflation at 0.8%

The Herald reports:

Tradable inflation, which covers items open to foreign competition, was unchanged in the quarter, due to falling prices for second-hand cars, petrol and dairy products. On an annual basis, tradable inflation shrank 1.2 per cent.

Non-tradable inflation rose 0.5 per cent in the quarter at an annual pace of 2.3 per cent, mainly due to higher local authority rates.

Rates can not keep increasing as an unsustainable rate.

Transport prices fell 1.1 per cent in the quarter, with the price of petrol down 1 per cent, second-hand car prices down 2.8 per cent and domestic air fares falling 7.8 per cent. Fresh milk prices fell 3.8 per cent in the quarter, while telecommunication services prices declined 1.8 per cent.

Food prices rose 1.1 per cent in the September quarter, led by more expensive produce, while grocery food prices fell 1.6 per cent.

Dwelling insurance prices surged 17 per cent in the quarter, and are up 43 per cent on an annual basis as insurers pass on rising reinsurance costs in the wake of a series of earthquakes that levelled Christchurch, the country’s second-biggest city.

Yeah my building insurance costs have doubled, and our building is well above code.

What I find most interesting is the household energy costs. Do you recall earlier this year stories proclaiming massive increases in electricity prices, and the like. I was somewhat critical of those stories as they never gave any hard data as to what the actual increases were.

Well for the quarter, household energy costs increased a mere 0.3%. For the year a 3.9% increase. This compares to annual near 8% increases from 2002 to 2008.