Latest / Best of Business / Catherine Beard: BusinessNZ Advocacy Director on the Reserve Bank Governor's speech about fuel prices and the impact on inflation

Transcript

Catherine Beard: BusinessNZ Advocacy Director on the Reserve Bank Governor's speech about fuel prices and the impact on inflation · Best of Business

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  Speaker 1: You're listening to a podcast from news Talk ZEDB. Follow
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• 0:17
  Speaker 2: So the RBNZ Governor Arna Breman's broken his silence on
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  Speaker 2: the fuel situation.
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  Speaker 3: We are likely to see higher headline inflation over the
• 0:26
  Speaker 3: near term and somewhat weaker growth momentum. I will not
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  Speaker 3: rule out neither retakes nor red cuts because of the
• 0:37
  Speaker 3: uncertainty and the global environment.
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  Speaker 2: The message to business, we're watching price increases closely, We're
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  Speaker 2: watching wage hikes, potential wage hikes closely. Can't get into
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  Speaker 2: an inflation feeding spiral.
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  Speaker 3: Here.
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  Speaker 2: Catherine bed was listening to the speech in Business end
• 0:51
  Speaker 2: Zen joys us this morning.
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  Speaker 4: Morning, Catherine, good morning.
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  Speaker 2: So business is going to hike prices.
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  Speaker 4: Look, I believe they will hold off as long as
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  Speaker 4: they possibly can. And you know, there was discussion about
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  Speaker 4: for supplies to make those any fuel increases quite transparent
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  Speaker 4: so that you know they're not kind of getting baked in,
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  Speaker 4: so very much holding off. We had supermarkets in the room,
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  Speaker 4: we had ports, we had banks talking about how their
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  Speaker 4: customers are handling this. So obviously this all depends how
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  Speaker 4: long it goes on. If it's not too long then
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  Speaker 4: it was actually quite a reassuring speech. I think, you know,
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  Speaker 4: she pointed out that banks are well capitalized and we
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  Speaker 4: are in the early stages of economic recovery, with manufacturing
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  Speaker 4: performing quite well. Service is slower to improve. But I
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  Speaker 4: guess the point being that it's not a hot economic market,
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  Speaker 4: so if this is inflationary, it's kind of further down
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  Speaker 4: the track, was the message.
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  Speaker 2: I think, yeah, in short term they can look through it,
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  Speaker 2: but anything medium or longer term than have to start
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  Speaker 2: doing something serious about it.
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  Speaker 4: Yeah, And I think the message was that that's not
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  Speaker 4: now and that New Zealand's not in a bad place
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  Speaker 4: to you know, to weather it. They will be super
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  Speaker 4: focused on inflation to make sure that it doesn't start
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  Speaker 4: to get baked in. And you know, she kind of
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  Speaker 4: made the point which everybody knows that an inflation re
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  Speaker 4: environment really steals everybody's purchasing power and it's it's not good.
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  Speaker 4: So but yeah, look, I think it was it was positive.
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  Speaker 4: It was quite well received, and businesses are preparing for
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  Speaker 4: the worst obviously, but that things at the moment are
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  Speaker 4: not too bad, and that the feeling I got was that,
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  Speaker 4: particularly for some of the big businesses, you know, they
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  Speaker 4: could probably get through to about the middle of the
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  Speaker 4: year before things start to go quite pear shaped, and
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  Speaker 4: hopefully that doesn't come about because the situation gets sorted.
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  Speaker 2: Appreciate your time this morning, Catherine bed Business end Z.
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