Inflation rises to highest annual rate since mid-1990

Inflation has hit its highest annual rate in 30 years.

Consumer prices rose 1.4 percent in the three months ended December, taking the annual inflation rate to 5.9 percent.

The strongest rises were for fuel, household expenses, which were partly offset by cheaper food.

Pressure on prices is expected to continue for the next few months because of the pandemic and supply chain disruptions.

The strength of inflation is set to drive the Reserve Bank to raise interest rates which will flow through to housing and business borrowing rates.

Prime Minister Jacinda Ardern said the rate of inflation was very much as predicated on the global situation, and in the US, for example, the rate was even higher than in New Zealand.

Oil prices and international tensions that affect those oil prices were a contributing factor, she said.

"We are not alone in experiencing high rates of inflation."

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