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Recent releases

Underlying price growth weakens in December As forecast, headline inflation was 0.8%pa in the December quarter, with falling oil prices knocking back tradable inflation over the period. Stripping out the effects of lower oil prices, underlying inflation was 1.1%pa — a weak result, even for the traditionally subdued December quarter. With underlying inflation close to going below the Reserve Bank’s 1-3% target band, it is becoming difficult to envisage the Bank lifting the official cash rate before the end of 2015. Read more

Widespread house sales growth in December Seasonally adjusted house sales surged upwards by 8.8% in December to reach their highest level since June 2007. Driving this lift was another double-digit increase in Auckland house sales, which was topped off by a 14% uptick in sales in Wellington during December — the region’s fastest monthly growth rate since May 2012. With strong migrant numbers and home-buyers now better prepared to make the 20% deposit often required for new mortgages, sales activity is expected to continue trending upwards over the year ahead. Read more

Commentary

Is the European crisis over? And so the European Central Bank (ECB) has finally taken on a programme of full quantitative easing, with the ECB committing to significant asset purchases until at least September 2016. Two years and four months after the US undertook a similar programme (QE3), and four months after the US ended its programme of purchases, Europe has decided the time for its own purchase programme has come.
Taking on the world with free trade Over the year to September 2014, exports accounted for 29%of New Zealand’s economic activity.  As a small exporting nation, New Zealandis generally located a long way from the biggest population bases, and istrying to compete in a world where markets are biased towards domesticproducers or other countries with longstanding trade arrangements.  As aresult, New Zealand has sought both bilateral and multilateral trade agreementsas a way to crack overseas markets.  Read more.

From the beach 2015 Key issues faced by New Zealand businesses this year includethe flow-on effects from lower oil and dairy prices, while migration’sinfluence on the supply of labour and the housing market will also beimportant. Read more.

Latest Forecasts

Best before: February 2014

If you’ve gone to the fridge and taken a swig of milk from the bottle lately, you will have noticed it’s got lumps in it – which is hardly surprising when you look at the “best before” date. Prospects for the dairy payout and GDP growth looked pretty tasty back in February, but things have soured markedly throughout the course of this year.