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Brad Olsen: Infometrics Principal Economist on food prices rising by 4.4 percent · Best of Business

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  Speaker 2: Food prices are up four point four percent in the
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  Speaker 2: year to May. Brad Olson is Informetrics principle economist and
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  Speaker 2: with us now.
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  Speaker 3: Hey, Brad, good evening.
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  Speaker 2: So largely driven by dairy, meat, poultry and fish.
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  Speaker 3: Yes, that's right.
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  Speaker 4: I mean you've seen those continued cost pressures. You look
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  Speaker 4: at the likes of butter up something like fifty two
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  Speaker 4: percent over the last year. Again, at your beef prices,
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  Speaker 4: your other dairy have all gone up. But that four
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  Speaker 4: point four percent food price inflation over the last year,
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  Speaker 4: that is the fastest now since the end of twenty
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  Speaker 4: twenty three. It's not back to the peak that it was,
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  Speaker 4: but it is starting to make us feel a little
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  Speaker 4: bit more uncomfortable given all of those price changes that
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  Speaker 4: have come through. What is clear looking at some of
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  Speaker 4: the numbers is that there's a few very specific items
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  Speaker 4: like we've just highlighted, that are increasing and they're making
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  Speaker 4: things uncomfortable across the wider shop that people are probably doing.
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  Speaker 4: There's not as much intensity, but there are just some
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  Speaker 4: really quite thorny issues coming through that is prompting people
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  Speaker 4: to ask questions of is their further inflationary pressure to come?
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  Speaker 3: We thought we'd got rid of it, but perhaps not.
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  Speaker 2: Do you worry about them? I mean, this is obviously
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  Speaker 2: higher than the band and higher than what we're seeing
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  Speaker 2: across the economies.
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  Speaker 3: Are you worried about this a little bit?
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  Speaker 4: And I think it's not just the food prices either.
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  Speaker 4: You look at the likes of energy costs that are
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  Speaker 4: coming forward. Are the likes of electricity up I think
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  Speaker 4: eight point seven percent odd roughly over the last year.
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  Speaker 4: Gas prices for households up a well around fifteen percent
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  Speaker 4: over the last year. All of those become very uncomfortable
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  Speaker 4: and they're pretty vital costs. You can't choose not to
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  Speaker 4: pay them. And so the fact that you've got all
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  Speaker 4: of that, the fact that in the last week you've
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  Speaker 4: seen with this Israel Iran conflict, you know oil prices
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  Speaker 4: are spiking. That's probably going to come through and hit
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  Speaker 4: petrol prices in New Zealand. The fact that you know
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  Speaker 4: the Reserve Bank last time they met, someone on the
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  Speaker 4: committee was a holdout and took it to a vote
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  Speaker 4: and said I don't want to change interest rates because
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  Speaker 4: I'm a bit worried about what's coming forward.
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  Speaker 3: All of that.
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  Speaker 4: Suggests that again we're just in the sort of uneasy
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  Speaker 4: position where the economy doesn't feel like it's doing well,
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  Speaker 4: and so on that basis, you'd think that there's further
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  Speaker 4: interest rate cuts to come, but inflationary pressure still too hot,
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  Speaker 4: looking like it's reaccelerating still, and if that's the case,
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  Speaker 4: it makes that interest rate conversation quite difficult.
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  Speaker 2: Ye, well, I would say bets are on a pause.
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  Speaker 4: Yet at the moment, I think increasingly likely that you
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  Speaker 4: see a pause in July, and it may well be
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  Speaker 4: an extended pause. They might not cut again. I don't
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  Speaker 4: think we can make that call definitively yet, but even
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  Speaker 4: financial markets have pulled back their expectations. At the end
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  Speaker 4: of last week there was only roughly I think a
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  Speaker 4: sixteen percent chance are of a further interest rate cut
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  Speaker 4: in July. So everyone is sort of taking a breath
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  Speaker 4: and trying to assess what all of this means.
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  Speaker 2: Now, do you want to explain to us this extremely
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  Speaker 2: early appearance at the gates of Field days.
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  Speaker 4: I heard that I was sort of taken to ask
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  Speaker 4: over the last week, although you said some lovely things
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  Speaker 4: about me later that evening.
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  Speaker 2: You kind remember.
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  Speaker 4: Oh, your answer was sort of giving me all sort
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  Speaker 4: of platitudes, which was.
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  Speaker 2: We think, we think you are the life of the party.
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  Speaker 3: I'm glad. I'm glad that other people think of the
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  Speaker 3: life of the party.
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  Speaker 2: By the way, as a judge, do you do a
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  Speaker 2: good job?
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  Speaker 3: Well, I'd like to think so.
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  Speaker 4: I mean, I've done my training and similar But I mean, look,
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  Speaker 4: turning to the field Day's piece, I had some meetings
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  Speaker 4: early on in the morning. Field Day's traffic is absolutely menic,
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  Speaker 4: and I thought, look, if I want to get there
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  Speaker 4: and actually have a you know, be able to get
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  Speaker 4: through my meetings, I'll show up really early.
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  Speaker 3: I'll get an early park, I'll hid inside, get.
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  Speaker 4: A coffee, get set up for the six early a Oh,
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  Speaker 4: I think, to be honest, I parked up at about
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  Speaker 4: five fifty eight am.
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  Speaker 3: I was there real early. Hey, you don't drink a
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  Speaker 3: I don't mean. Look, I an economist. So have you
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  Speaker 3: seen the price of the stuff? Yeah?
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  Speaker 2: Oh, good from you, Brad.
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  Speaker 3: I love it.
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  Speaker 2: You live by your principles. Brad.
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  Speaker 3: No, you are you.
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  Speaker 2: I don't know how you have all the energy, but
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  Speaker 2: now I figured it out, brad Elson. Thank you, Infimetrics
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  Speaker 2: principal economists.
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