Finally inflation is below 3%

Stats NZ reports:

• Annual inflation down from 3.3% to 2.2%
• CPI went up 0.6% in the quarter
• Non-tradeable inflation still high at 4.9%
• Tradeable inflation at -1.6%

It is good inflation is down to 2.2%, but this doesn’t mean prices are dropping. It just means that price increases are more modest.

The level of non-tradeable (or domestic) inflation is still high. That signals to me the next OCR cut would be 50 basis points, not the 75 some have called for.