NZ shares slide as inflation expectations jump

All eyes will now turn to the Reserve Bank of New Zealand (RBNZ) to see how aggressively they move to curtail inflation.

Senior ASB economist, Mark Smith said the 3% figure essentially locks in another official cash rate hike next week and raises the possibility of a 50-basis-point hike.

“The RBNZ will be concerned by these figures but will be comforted that longer-term inflation expectations have remained anchored close to 2%,” he said. 

Smith said he still expected a 25-point increase but said it will be a “very close call” between that and a 50-point hike.