Food inflation has picked up again after a brief dip with broad based increases driving up the rate.
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Stats NZ data showed fresh fruit and vegetables, groceries, takeaway meals, and soft drinks drove a 0.7 percent rise for May.
The main contributor for the monthly increase was a 1.1 percent rise in grocery prices with dairy products and notably yoghurt sharply higher, as was cooking oil.
Meat and poultry was the only food group to fall in price for the month.
“Many dairy items have seen price increases over the past month,” Stats NZ consumer prices manager Katrina Dewbery said.
“Yoghurt has seen the largest increase, with the weighted average price of a six-pack of yoghurt increasing from $5.60 to $6.40.”
The annual food inflation rate rose to 6.8 percent from 6.4 percent in April, after hitting an 11-year high of 7.6 percent in March.
ASB senior economist Mike Smith said the rise in food prices and data showing a 3.8 percent annual rise in house rents were set to join rising fuel prices in driving overall consumer inflation higher.
“All up, annual CPI inflation looks like it will move above 7 percent in the June 2022 year… and end 2022 at around 6 percent, with the clear risk that high inflation outcomes prove to be more persistent than earlier envisaged.
“This will clearly trouble the RBNZ (Reserve Bank) and prompt a more aggressive signalled pace of OCR (official cash rate) hikes despite a weaker backdrop for economic activity.”
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