Interest rate hike on cards this month

The consumers price index rose 0.8 per cent in the June quarter, the steepest such increase for three and a half years, pushing the annual rate to 2.4 per cent from 1.5 per cent in March, Statistics New Zealand figures show.

If international air fares had not dropped (21 per cent during the past year), the inflation rate would already be 3 per cent.

Construction costs remain a hotspot, rising 1.9 per cent in the quarter and 8.8 per cent over the year. Of the construction companies reporting higher prices, 96 per cent cited higher components costs, 78 per cent higher subcontractors' charges and 65 per cent rising labour costs.

Although prices of existing homes are not included in the CPI, the buoyant housing market is reflected in real estate agents' fees, which rose 4.4 per cent, or 21.4 per cent, over the year.

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