Inflation has been accelerating largely thanks to the collapse in the pound following the Brexit vote, which makes imported goods more expensive. The latest report showed energy prices rose 3 percent from the previous month and food costs advanced 0.2 percent.
New Zealand government bonds surged at the time of closing Wednesday, tracking overnight movement in the USA counterpart ahead of the latter's consumer price inflation data (CPI) for the month of January, scheduled to be released later today. With our pay packets lagging price rises, we're feeling progressively poorer as each month rolls by and this inevitably means we'll spend less.
After rising strongly since the middle of 2016, food price inflation now appears to be slowing.
Other items contributing to the gain in CPI included rents and owners' equivalent rent, which both rose 0.3 percent from December; medical care, up 0.4 percent; and motor vehicle insurance, which advanced 1.3 percent, the most since 2001.
Against the euro, the pound was trading flat at 1.12 euros.
The cumulative growth in these three sectors during April-December 2017 over the corresponding period of 2016 has been 2.8 per cent, 3.8 per cent and 5.1 per cent, respectively.
Airfares, which usually fall after the holidays, also dropped at a slower rate, down just 33.2% month on month, compared to a 36% drop a year earlier.
In that month, the Bank of England (BoE) raised interest rates by a quarter-point to 0.5 per cent from historical lows, the Bank's first monetary tightening in a decade.
As the rise in core inflation was concentrated in the recreational and cultural services sector, where labour costs account for a high percentage of firms' costs, the data lend weight to the MPC's concern that domestically-generated inflation is beginning to pick-up in response to the tight labour market, said economist Sam Tombs at Pantheon Macroeconomics.
But last week the Bank of England said it's likely to raise interest rates sooner and by more than it thought only three months ago because Britain's slow-moving economy is getting a boost from the global recovery.
NEW DELHI, Feb 12 (Reuters) - India's retail inflation slightly eased in January from a 17-month high in December but remained above the 4 percent medium-term target of the Reserve Bank of India (RBI) for the third straight month.