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Speaker 1: Now Benz is predicting inflation to again creep outside the

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Speaker 1: Reserve Bank's target band, heading three point one percent annually

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Speaker 1: by September. Comes after food inflation we had yesterday up

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Speaker 1: to its highest level in eighteen months. Overall food prices

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Speaker 1: up four point four percent in the last year, meat, poultry, dairy,

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Speaker 1: keeping those prices high. Your milk, your butter, your cheese. Cameron,

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Speaker 1: Baggery economist is with me this morning. Cameron, good morning,

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Speaker 1: good morning. Good to have you on. What do you

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Speaker 1: reckon inflation? You're going to get out of the band again.

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Speaker 1: Is that a big deal?

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Speaker 2: It's creeping up, But the composition to inflation matters a

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Speaker 2: little bit more than inflation itself. So what we keep

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Speaker 2: a pretty close eye is what's called non trade inflation,

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Speaker 2: which is the mestic inflation. You know, that's the piece

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Speaker 2: that the Reserve Bank can control. It's galivated but still

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Speaker 2: being heading south. So we're taking with a comfort of debt.

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Speaker 2: But what we're seeing out there at the moment is

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Speaker 2: furtsy of high commodity prices, particularly meat, gary prices. What's

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Speaker 2: called imput inflation or not tradeable inflation started to pop

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Speaker 2: back up, and I guess to consume what we've got

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Speaker 2: at the moment. I've got what's going on in the

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Speaker 2: Middle East is the oil prices have spiked, and yet

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Speaker 2: these or petal prices have been trending down over the

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Speaker 2: past oft of six months. They've been a deflationary force.

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Speaker 2: The last thing we want is to see the internal

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Speaker 2: and inflationary force and start to push us a little

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Speaker 2: bit more.

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Speaker 1: So this I mean, it's it's a take with one

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Speaker 1: and give with the other, isn't it? The butter and

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Speaker 1: milk and cheese and stuff, because we pay more for it,

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Speaker 1: but then we also get more for it through our

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Speaker 1: primary sector.

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Speaker 2: You know. A what we're seeing at the moment is

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Speaker 2: a really good what it's called ex food leg recovery.

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Speaker 2: So we're earning a way to growth as opposed to

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Speaker 2: spending it, which is the sort of growth that you

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Speaker 2: want to see.

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Speaker 1: You know.

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Speaker 2: I was a few days last week and the farmers

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Speaker 2: are pretty cheaper. Why they've got a little bit of

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Speaker 2: money in there in their back pockets. Unfortunately in the

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Speaker 2: front and farmers have got a little bit of money

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Speaker 2: in their back pockets. You know, we're going to see

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Speaker 2: a little more food and inflation. So vegetable prices are up, meat, cheese,

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Speaker 2: butter is up fifty one percent thro the year on year.

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Speaker 2: So what's good for the farmers is not necessarily good

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Speaker 2: for people in the back pocket.

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Speaker 1: Meanwhile, if you're a landlord, you've actually got the lowest

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Speaker 1: increased two point eight percent increase in rent prices, lowest

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Speaker 1: since January twenty fifteen, I think, And I guess that

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Speaker 1: adds up when you look at immigration the way that's going.

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Speaker 2: Yes, if you look at the immigration numbers of what

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Speaker 2: around twenty one thousand I think was the last three

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Speaker 2: natural population grows another twenty thousand, that's a pretty lot number.

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Speaker 2: You've got core demand in terms of people bums on

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Speaker 2: seats around forty thousand divided by two point five rough

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Speaker 2: number of people per houses. Then we need to be

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Speaker 2: building a little bit south of twenty thousand houses per year.

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Speaker 2: How many building percents we're issuing thirty to thirty five thousand.

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Speaker 2: There's a lot of stock up there still, it clear.

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Speaker 2: So that just adds up to a pretty weak mental

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Speaker 2: market out there, which is yeah, good news for some people.

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Speaker 1: Cameron, appreciate your time this morning. Cameron Baggery economists with

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Speaker 1: me talking about those food prices out yesterday and the

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Speaker 1: potential for a reserve bank. Outer band cpis for more

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