1 00:00:03,000 --> 00:00:08,480 Speaker 1: Questions, answers, facts, analysis, the drive show you trust for 2 00:00:08,520 --> 00:00:11,680 Speaker 1: the full picture. Brian Bridge on Heather dup c allan 3 00:00:11,800 --> 00:00:16,280 Speaker 1: drive with one New Zealand let's get connected news talkstb. 4 00:00:15,920 --> 00:00:18,919 Speaker 2: Good negative seven after five newstalks ATB So you've heard 5 00:00:18,920 --> 00:00:21,840 Speaker 2: the story. Food prices there, you've done the shops, you 6 00:00:21,920 --> 00:00:24,280 Speaker 2: know at four point six percent in the year to June, 7 00:00:24,520 --> 00:00:27,240 Speaker 2: dairy meat leading the way. This is statsne dead data 8 00:00:27,280 --> 00:00:30,960 Speaker 2: out today. Butter up almost fifty percent, forty six percent, 9 00:00:31,480 --> 00:00:34,760 Speaker 2: a lamb leg roast up thirty seven percent. The question 10 00:00:35,040 --> 00:00:37,479 Speaker 2: is what does this do to the overall level of inflation? 11 00:00:37,960 --> 00:00:40,600 Speaker 2: Will it soon how much you're spending at the supermarket 12 00:00:40,720 --> 00:00:43,160 Speaker 2: potentially affect how much we're spending on our mortgages. Brad 13 00:00:43,159 --> 00:00:47,040 Speaker 2: Olson Infametrics, principal economists with US tonight, Hey, Brad Good evening. 14 00:00:47,240 --> 00:00:50,559 Speaker 2: So does this risk pushing up overall CPI? 15 00:00:52,120 --> 00:00:54,720 Speaker 3: It does, is a short answer. We are worried that 16 00:00:55,040 --> 00:00:57,880 Speaker 3: when we see the numbers on Monday for headline inflation 17 00:00:58,800 --> 00:01:01,560 Speaker 3: for the quarter nd June, that there will be more 18 00:01:01,600 --> 00:01:04,520 Speaker 3: pressure in there. Most market picks are somewhere between sort 19 00:01:04,560 --> 00:01:07,840 Speaker 3: of two point six and two point nine percent per annum. 20 00:01:08,319 --> 00:01:11,440 Speaker 3: Of course, that would be a further reacceleration off the 21 00:01:11,640 --> 00:01:13,600 Speaker 3: two point five percent figure that we had at the 22 00:01:13,640 --> 00:01:16,200 Speaker 3: start of the year. For the Reserve Bank, that won't 23 00:01:16,200 --> 00:01:19,480 Speaker 3: be useful and helpful news for them. But at the 24 00:01:19,520 --> 00:01:23,920 Speaker 3: same time, I think we've signaled themselves looking through some 25 00:01:24,040 --> 00:01:26,560 Speaker 3: of the numbers that they anticipate they expect that there 26 00:01:26,600 --> 00:01:29,560 Speaker 3: will be some of that near term volatility. They're hopeful 27 00:01:29,600 --> 00:01:31,800 Speaker 3: that it's not persistent, that it is more temporary, and 28 00:01:31,840 --> 00:01:35,600 Speaker 3: therefore they should still be able to marginally reduce interest 29 00:01:35,680 --> 00:01:37,840 Speaker 3: rates through the rest of this year a little bit. 30 00:01:38,040 --> 00:01:40,319 Speaker 3: But I think importantly, if you're sitting out there and 31 00:01:40,360 --> 00:01:42,120 Speaker 3: you're looking at some of these numbers, it does make 32 00:01:42,160 --> 00:01:44,440 Speaker 3: you uncomfortable, right whether or not you're a household or 33 00:01:44,440 --> 00:01:46,840 Speaker 3: a decision maker, that we're in this position where you're 34 00:01:46,840 --> 00:01:49,280 Speaker 3: seeing a bit more of that intense pricing pressure, but 35 00:01:49,320 --> 00:01:52,720 Speaker 3: you're still seeing the weaker general economic tone. Normally, those 36 00:01:52,760 --> 00:01:55,800 Speaker 3: two things are the opposite of what you'd see exactly. 37 00:01:55,880 --> 00:01:59,160 Speaker 2: It's felt a little bit freaky seeing the number today 38 00:01:59,200 --> 00:02:01,880 Speaker 2: and knowing that we are hoping and praying for another 39 00:02:02,040 --> 00:02:04,360 Speaker 2: oc well of those with mortgages, for another OCAA cup 40 00:02:04,400 --> 00:02:07,480 Speaker 2: next month. What about wage growth, because the government obviously 41 00:02:07,520 --> 00:02:10,320 Speaker 2: talks a lot about wage growth keeping ahead of inflation. 42 00:02:10,480 --> 00:02:12,400 Speaker 2: If we are going to see inflation go up, is 43 00:02:12,400 --> 00:02:15,600 Speaker 2: it still going to be ahead of well, wages till 44 00:02:15,600 --> 00:02:16,160 Speaker 2: be ahead of. 45 00:02:16,120 --> 00:02:19,560 Speaker 3: It, you'd still be expecting that wages would be growing 46 00:02:19,840 --> 00:02:22,519 Speaker 3: ahead of inflation. The challenge, of course, for the moment 47 00:02:22,919 --> 00:02:25,400 Speaker 3: is that wages are only growing if you've got a 48 00:02:25,480 --> 00:02:28,480 Speaker 3: wage to grow, if you're one of the five point 49 00:02:28,480 --> 00:02:31,480 Speaker 3: one percent of people that are currently unemployed. We saw 50 00:02:31,600 --> 00:02:35,480 Speaker 3: more benefit numbers today showing further increases in those who 51 00:02:35,520 --> 00:02:38,000 Speaker 3: are out of work and needing government support. You know 52 00:02:38,040 --> 00:02:40,320 Speaker 3: that that's a pretty tough environment at a time when 53 00:02:40,760 --> 00:02:43,240 Speaker 3: it's across the board these increases that I think that 54 00:02:43,240 --> 00:02:45,400 Speaker 3: that are a real challenge. It's not just you know, 55 00:02:45,440 --> 00:02:48,160 Speaker 3: some of your are more expensive items. I mean butter, Yes, 56 00:02:48,200 --> 00:02:50,360 Speaker 3: it's expensive, but let's be quite clear, it's not the 57 00:02:50,400 --> 00:02:52,880 Speaker 3: thing that you know, households are eating a whole block 58 00:02:52,919 --> 00:02:55,440 Speaker 3: of every day. The worry for me actually looking through 59 00:02:55,440 --> 00:02:57,639 Speaker 3: some of these numbers is it's the other basis. It's 60 00:02:57,639 --> 00:03:00,799 Speaker 3: the fact that mince prices are now head nearly twenty 61 00:03:00,800 --> 00:03:02,800 Speaker 3: two dollars a kilo. You know, you can't even have 62 00:03:02,840 --> 00:03:06,560 Speaker 3: a cheap mince meal anymore at a cheap price. It's 63 00:03:06,600 --> 00:03:10,119 Speaker 3: the fact that energy costs are increasing. Electricity costs now 64 00:03:10,400 --> 00:03:12,960 Speaker 3: are increasing ten percent over the last year. That's the 65 00:03:13,120 --> 00:03:16,799 Speaker 3: fastest pace for our energy and electricity gains that we've 66 00:03:16,800 --> 00:03:19,320 Speaker 3: seen in over a decade. So it's the worry that, Look, 67 00:03:19,320 --> 00:03:22,240 Speaker 3: if you're already in that tough position, things are not 68 00:03:22,280 --> 00:03:24,720 Speaker 3: getting any easier, and of course for the Reserve Bank, 69 00:03:24,760 --> 00:03:27,040 Speaker 3: they are a bit more nervous about those pricing pressures. 70 00:03:27,040 --> 00:03:29,320 Speaker 3: So we're still in a tough position and I don't 71 00:03:29,360 --> 00:03:32,519 Speaker 3: think we'll get out of it massively quickly. Better signs 72 00:03:32,600 --> 00:03:34,560 Speaker 3: on the horizon, but it's still tough out there for 73 00:03:34,600 --> 00:03:34,920 Speaker 3: the minute. 74 00:03:34,960 --> 00:03:37,200 Speaker 2: All Right, interesting, Brad, Thank you. Brad Olsen infor Metrics 75 00:03:37,200 --> 00:03:38,720 Speaker 2: Principal Economists. 76 00:03:38,760 --> 00:03:41,920 Speaker 1: For more from Heather Duplessy Allen Drive, listen live to 77 00:03:42,000 --> 00:03:45,040 Speaker 1: news Talks it'd be from four pm weekdays, or follow 78 00:03:45,080 --> 00:03:46,800 Speaker 1: the podcast on iHeartRadio.