July 17, 2015 7:00am by David Farrar

Inflation at just 0.3%

The CPI increased 0.3 percent in the year to the June 2015 quarter, following a 0.1 percent increase in the year to the March 2015 quarter.

The prices of tradable goods and services (which face foreign competition) decreased 2.0 percent in the year, with lower prices for petrol (down 7.4 percent) and for international airfares (down 6.3 percent).

Non-tradable goods and services increased 2.0 percent, the smallest annual increase since the December 2001 quarter. The main contributor was cigarettes and tobacco prices (up 14 percent), influenced by the increase in excise duty in January 2015 – excluding cigarettes and tobacco, the CPI fell 0.1 percent in the year to the June 2015 quarter.

So if you are not a smoker, we’ve had basically no inflation at all. It means every dollar of your pay increase you get to keep, rather than have it gobbled up by increasing prices.

Of note is that seasonally adjusted electricity prices have been constant for the last 12 months.

Here’s a comparison of average annual price increases in six and a half years of National, compared to the last six and a half of Labour.