The Bank of New Zealand emphasized that in the context of repeated global fuel price shocks, companies are currently rapidly passing costs on to consumers. This has heightened concerns about the central bank's need to raise interest rates further. Paul Conway, chief economist at the Bank of New Zealand, said, “The drop in oil prices has eased recent inflationary pressure, which reflects some progress in resolving the Middle East conflict. However, the conflict has triggered yet another major inflationary shock. The current challenge facing monetary policy is to ensure that this shock does not turn into sustained inflation.” He added: “Research shows that compared to the past, New Zealand businesses are now more anxious to pass on rising costs, and are less willing to cut prices when costs fall back.” “Under the same conditions, this heightens the risk that a temporary shock will evolve into continued inflation,” Conway said in a speech at a business rally. “After the inflation rate has been above target levels for a long time, we can no longer take for granted that inflation expectations will continue to be firmly anchored.”

The Bank of New Zealand emphasized that in the context of repeated global fuel price shocks, companies are currently rapidly passing costs on to consumers. This has heightened concerns about the central bank's need to raise interest rates further. Paul Conway, chief economist at the Bank of New Zealand, said, “The drop in oil prices has eased recent inflationary pressure, which reflects some progress in resolving the Middle East conflict. However, the conflict has triggered yet another major inflationary shock. The current challenge facing monetary policy is to ensure that this shock does not turn into sustained inflation.” He added: “Research shows that compared to the past, New Zealand businesses are now more anxious to pass on rising costs, and are less willing to cut prices when costs fall back.” “Under the same conditions, this heightens the risk that a temporary shock will evolve into continued inflation,” Conway said in a speech at a business rally. “After the inflation rate has been above target levels for a long time, we can no longer take for granted that inflation expectations will continue to be firmly anchored.”