New Zealand firms are more likely to pass on cost increases now than they were in the past and are less likely to cut prices when those pressures subside, the chief economist of the country’s central bank has said.
In a speech today (July 14), Paul Conway of the Reserve Bank of New Zealand (RBNZ) said this could increase the likelihood of persistent inflation, which might force the bank to raise interest rates further.
“When above-target inflation changes expectations and price-setting behaviour
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