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Food prices rose 12.5 per cent in the year to April 30, that’s the highest rate since September 1987.
Yesterday’s food price statistics were a stark reminder that Kiwis are still feeling the pain from the rising cost of living.
Despite the fact that higher interest rates are starting to bite and the economy is starting to slow, we cannot yet relax in the fight to beat inflation.
Anyone who remembers the year to September 1987 will recall the country was in a pre-sharemarket crash, inflationary investment bubble. Mortgage rates were up at eye-watering heights, close to 20 per cent.
Most economists expect the Reserve Bank will need to deliver at least one more Official Cash Rate hike on May 24, taking it to 5.5 per cent.
That will see two-year fixed rates above 7 per cent.
Clearly, we are not seeing a repeat of those 1980s excesses.
With the size of the average mortgage so much larger now (nominally and relative to income) the pain will be real.
There’s no getting around the need to rebalance the economy and pay the price for the Covid stimulus-fueled boom - albeit a boom that successfully protected us from a far more serious economic slump than the one we now face.
But there is hope that we are nearing the end of this painful part of the economic cycle.
On Thursday, markets around the world cheered the news that US consumer price inflation had cooled again - the 10th consecutive month of deceleration.
The US Consumer Price Index climbed 4.9 per cent in April from a year earlier, less than the 5 per cent that Bloomberg’s survey of economists had expected.
Stripping out volatile prices like food and oil, the core measure (that central banks tend to focus on) was an improved 5.5 per cent.
Globally, commodity prices have plunged in the past year. We are now seeing the price effects of the pandemic play through in something like the transitory manner that most economists expected.
But the flow-on through to domestic economies - as local businesses pass on costs and wages rise - is taking longer to unwind.
There was a risk that domestic inflation would spiral and become embedded. And that required central bank action.
In New Zealand, the flooding and weather events have compounded food price inflation, but there will always arise short-term issues to deal with.
Despite that the April food price index rise was not actually a shock to economists - it was in line with expectations.
It won’t have shaken the view that topline inflation has peaked.
As that food price spike plays through the numbers, we’ll be left with wages and employment as the last piece of the puzzle to fall into place.
Once we can be sure that we see the rate of inflation is on the decline, there will be scope for the self-inflicted pain of monetary tightening to be eased.
In other words, the Reserve Bank will have regained some control of the economy - until the next big global shock at least.
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Three lovely black miniature poodle puppies available now
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The breeder is registered with Dogs NZ and we can provide papers for the pups.
The puppies have been vaccinated and wormed.
The puppies are available for sale now.
There are two girls and one boy. We've called them Honey, Heather and Horatio, but of course you can choose your own name.
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Q&A: Ask a question about...Online Safety
Continuing with Neighbourly's online Q&A with experts in their field, this week we are tackling online safety with Jandy Fiske from Netsafe.
Jandy Fiske has been with Netsafe for nearly 8 years. Starting on their helpline, she's now Netsafe's Community Engagement Advisor. Jandy says: 'I'm passionate about online safety because I strongly oppose bullying and want to support those affected by it.'
Jandy is passionate about protecting vulnerable communities and is promoting online safety to ensure no one falls prey to online scams. She can answer your questions about any type of online scams, and also about online harm such as online bullying.
↓ Ask your question below now and she'll be online on Wednesday, 11th September to reply to you ↓
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Police are investigating after a bus driver was allegedly punched in the face and "had some teeth knocked" out in Avondale.
Police said it was alerted to the incident at about 10.17am yesterday.
"The driver received facial injuries and was transported to hospital," a spokesperson said.
"Police are making inquiries into the assault to identify those involved."
Tramways Union president Gary Froggatt said the driver was allegedly punched in the face by a passenger.
Froggatt wanted more to be done about "issues like this".
"I realise you can't have a policeman on every bus, but the drivers and the unions seem to be left out of the conversation.
"He's in hospital getting stitches put in his knee. He had his teeth knocked out," he said.
Froggatt said he got "about three or four calls like this" from drivers a month.
"I feel for the family, the drivers should be able to go to work and go home safe."
Auckland Transport said it was aware of the incident and assisting police with their investigation.
Group manager of public transport operations Rachel Cara said the bus operator was ensuring the driver has the support they need.
"We operate over 13,000 bus services every weekday and fortunately the majority of our passengers are amazing, but these isolated incidents are concerning.
"Our bus drivers work tirelessly to keep Aucklanders moving and deserve to feel safe in their place of work.
"We continue to work closely with police, other agencies and communities to improve safety on public transport."
Police urged witnesses to call 105.
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