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Speaker 1: Twenty twenty five inflation numbers. They're coming today in a

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Speaker 1: week that's actually been very good for our economy going forward.

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Speaker 1: Is inflation playing its part? Is it at least close

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Speaker 1: to being in that zero to three percent box? Mark

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Speaker 1: Smiths ASB Senior economist and is with US.

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Speaker 2: Market morning, Good morning, Mike.

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Speaker 1: RB has two point seven, so that'll be a miss.

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Speaker 1: You're on zero point six. So you're seeing some heat

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Speaker 1: here slightly high.

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Speaker 2: Yes, to be fair to the RB and said some

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Speaker 2: December pricing data came out after they finished their forecast

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Speaker 2: and that was considerably stronger than expected, and that resulted

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Speaker 2: in the market revising up their packs to around three

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Speaker 2: or three point wife for the year. Yeah.

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Speaker 1: So I'm reading about Miles Workman, you're mate tod ay

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Speaker 1: and zed yesterday he's talking about accommodation, international travel. Was

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Speaker 1: that a surprise.

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Speaker 2: Some of those aspects were? Yes, accommodation particularly and international

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Speaker 2: airfas either are recently volatile. What have been seeing it

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Speaker 2: late has been that inflation rate had been sort of

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Speaker 2: called by much lower sort of tradable goods and services.

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Speaker 2: Those things are now starting to turn around a bit

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Speaker 2: and that's contributing to pushing up that headline and inflation

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Speaker 2: right a little bit.

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Speaker 1: The fun game, if you want to call it. That

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Speaker 1: is where the RB comes into this. So February's a

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Speaker 1: dead set hold.

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Speaker 2: Fair are to be fair? Yes?

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Speaker 1: Okay, When do we start talking realistically about hikes or

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Speaker 1: is that way too soon?

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Speaker 2: I think probably a little soon, but again it's going

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Speaker 2: to be conditional on that inflation outlook. I think the

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Speaker 2: rbnz's view is that there's still a bit of spare

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Speaker 2: capacity in the economy and that should be sufficient to

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Speaker 2: push down domestic inflation, which can contribute to overall inflation

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Speaker 2: going closer to two percent on sort of over much

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Speaker 2: of the year. I think the issue that we have

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Speaker 2: is that there are still a lot of cost out there. Unfortunately,

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Speaker 2: the tragedy is we have just had just needs more

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Speaker 2: costs that have to be paid and those things that

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Speaker 2: are contributing to keeping inflation higher than it would otherwise be.

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Speaker 2: As well as that, we're starting to see a lot

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Speaker 2: more resilience in the New Zealand economy, which is a

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Speaker 2: great thing. The thing will be some of the things

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Speaker 2: that have been holding down domestic in placement rates, for example,

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Speaker 2: construction costs and rents they might start to turn around

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Speaker 2: as well, So as a result, we might see inflation

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Speaker 2: posting three percent rather than two percent over this year.

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Speaker 1: In Layman's terms, you bullish for twenty six or not?

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Speaker 2: Yes, we are. We put it at a piece earlier

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Speaker 2: in the year. We're very bullish on the year. Yes,

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Speaker 2: it was a bit of a false signal last year.

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Speaker 2: We think that everything's pretty much lined up for a

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Speaker 2: very good year. Now. What really needs to happen is, though,

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Speaker 2: is that pricing pressures need to remain contained if they can,

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Speaker 2: and that will result in It is about keeping the

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Speaker 2: official cash rates for as low.

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Speaker 1: As they can be, let's hope. So, Mike go well,

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Speaker 1: Mark Smith, who's the ASP senior economists thirteen past? How

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Speaker 1: much weight am I reading into the courier pole yesterday?

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Speaker 1: None really, but we'll build up a picture of poles

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Speaker 1: throughout the year. The reason I put no real weight

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Speaker 1: in it is because New Zealand first went up three

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Speaker 1: point eight. New Zealand first did not go up three

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Speaker 1: point eight. Nothing happened in the eNCA uing period between

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Speaker 1: poles for suddenly basically a third of their entire support

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Speaker 1: to suddenly materialize. That's what's wrong with poles up one

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Speaker 1: down one margin. Abera fully understand it, but the broad

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Speaker 1: picture is that the incumbent government will remain incumbent, and

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Speaker 1: that Labor, despite Chippy's very best effort to have a

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Speaker 1: go this week, needs to look at the numbers and

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Speaker 1: at sixty three seats to fifty seven, he's the one

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Speaker 1: who needs to convince the rest of us that he

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Speaker 1: needs another go or deserves another go. For more from

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