Latest / Early Edition with Ryan Bridge / Catherine Beard: BusinessNZ Advocacy Director on the Reserve Bank Governor's speech about fuel prices and the impact on inflation

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Catherine Beard: BusinessNZ Advocacy Director on the Reserve Bank Governor's speech about fuel prices and the impact on inflation · Early Edition with Ryan Bridge

• 0:00
  Speaker 1: So the RBNZ Governor Arna Breman's broken his silence on
• 0:03
  Speaker 1: the fuel situation.
• 0:04
  Speaker 2: We are likely to see higher headline inflation over the
• 0:09
  Speaker 2: near term and somewhat weaker growth momentum. I will not
• 0:15
  Speaker 2: rule out neither retakes nor red cuts because of the
• 0:21
  Speaker 2: uncertainty and the global environment.
• 0:23
  Speaker 1: The message to business, we're watching price increases closely, We're
• 0:26
  Speaker 1: watching wage hikes, potential wage hikes closely. Can't get into
• 0:30
  Speaker 1: an inflation feeding spiral. Here Catherine bed was listening to
• 0:33
  Speaker 1: the speech and business and z joys us this morning.
• 0:36
  Speaker 3: Morning. Catherine, good morning.
• 0:38
  Speaker 1: So business is going to hike prices.
• 0:42
  Speaker 3: Look, I believe they will hold off as long as
• 0:45
  Speaker 3: they possibly can. And you know, there was discussion about
• 0:52
  Speaker 3: for supplies to make those any fuel increases quite transparent,
• 0:57
  Speaker 3: so that you know they're not kind of getting baked in,
• 1:00
  Speaker 3: so very much holding off. We had supermarkets in the room,
• 1:05
  Speaker 3: we had ports, we had banks talking about how their
• 1:09
  Speaker 3: customers are handling this. So obviously this all depends how
• 1:14
  Speaker 3: long it goes on. If it's not too long, then
• 1:18
  Speaker 3: it was actually quite a reassuring speech. I think, you know.
• 1:21
  Speaker 3: She pointed out that banks are well capitalized and we
• 1:26
  Speaker 3: are in the early stages of economic recovery, with manufacturing
• 1:30
  Speaker 3: performing quite well. Service is slower to improve. But I
• 1:35
  Speaker 3: guess the point being that it's not a hot economic market,
• 1:39
  Speaker 3: so if this is inflationary, it's kind of further down
• 1:43
  Speaker 3: the track, was the message.
• 1:44
  Speaker 1: I think, Yeah, in short term they can look through it,
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  Speaker 1: but anything medium or longer term than have to start
• 1:50
  Speaker 1: doing something serious about it.
• 1:53
  Speaker 3: Yeah, And I think the message was that that's not now,
• 1:57
  Speaker 3: and that New Zealand's not in a bad place to
• 2:01
  Speaker 3: you know, to weather it. They will be super focused
• 2:04
  Speaker 3: on inflation to make sure that it doesn't start to
• 2:06
  Speaker 3: get baked in. And you know, she kind of made
• 2:09
  Speaker 3: the point which everybody knows that an inflation re environment
• 2:14
  Speaker 3: really steals everybody's purchasing power, and it's it's not good.
• 2:17
  Speaker 3: So but yeah, look, I think it was. It was positive.
• 2:20
  Speaker 3: It was quite well received, and businesses are preparing for
• 2:24
  Speaker 3: the worst obviously, but that things at the moment are
• 2:28
  Speaker 3: not too bad, and that the feeling I got was that,
• 2:32
  Speaker 3: particularly for some of the big businesses, you know, they
• 2:36
  Speaker 3: could probably get through to about the middle of the
• 2:38
  Speaker 3: year before things start to go quite pear shaped, and
• 2:42
  Speaker 3: hopefully that doesn't come about because the situation.
• 2:45
  Speaker 1: Gets sorted one hundred percent. Appreciate your time this morning,
• 2:48
  Speaker 1: Catherine bed Business end Z.
• 2:51
  Speaker 3: For more from Early Edition with Ryan Bridge.
• 2:53
  Speaker 1: Listen live to News Talks it Be from five am weekdays,
• 2:57
  Speaker 1: or follow the podcast on iHeartRadio