A survey of households conducted for the Reserve Bank (RBNZ) shows that people still think inflation's currently running at 5% (it's officially 2.7%), but expectations for future inflation have stabilised.
According to the latest quarterly Household Expectations Survey for the Reserve Bank (RBNZ), kiwi households see inflation at 4.0% in a year's time and 3.0% in two years' time. All the figures I'm quoting here are median figures.
There were about 1000 respondents to this survey.
And while the figures quoted above are all higher than the RBNZ would want and hope inflation is going to be (given the target is achieving inflation between 1% and 3%), it's worth noting that households invariably estimate inflation to be higher than it officially is. And it's probably well worth noting that food price inflation on an annual basis is actually currently running somewhere around 5% - that would definitely have an impact on current perceptions of inflation.
The reality is that the RBNZ would probably take some encouragement from the results of this latest survey - given the amount of talk there has been about a spike in inflation. The RBNZ will be having its latest review of the Official Cash Rate on Wednesday, August 20. And there will be nothing in this survey to discourage it from another cut.
The RBNZ has a growing roster of surveys (there's three) and they are all being released within days of each other. This is the second one to be released in the current quarter and it follows on from last week's survey of the 'experts' the Survey of Expectations, canvassing the views of business leaders and professional forecasters. That showed a settling of expectations for the future level of inflation - after rising very sharply in the previous survey.
But the survey the RBNZ is clearly looking to become its 'big' one in the future is the new quarterly Tara-ā-Umanga Business Expectations Survey, which has a big and broad sample size. The first one of these was released in May and the next one is due on August 18, just ahead of the next OCR review. And it’s likely the result from that one will have more sway with the RBNZ's Monetary Policy Committee (MPC) as it deliberates whether to reduce the current OCR of 3.25% down to 3.00%.
The RBNZ Household Expectations Survey was re-developed in 2022 Q1 and renamed to Tara-ā-Whare - Household Expectations Survey. The data for this report was collected by Research NZ on behalf of RBNZ.
The data for this report was collected by Research NZ on behalf of RBNZ. Fieldwork for this survey was conducted between 21 and 28 July 2025 following release of the latest inflation figures for the June quarter.
In other results in the latest survey:
• Households expected 4.9% average growth in their earnings in one year’s time, an increase from 4.4% last quarter.
• On average, households reported a 17.9% chance of not making a rent payment in the next 3 months, a decrease from 19.5% last quarter. Households reported a 15.1% chance of not making a mortgage payment in the next 3 months (12.3% in the previous quarter).
• On average, respondents believed there was a 41.2% chance they would find a new job in the next three months if they lost their job (39.1% in the previous quarter). This is the first increase following five consecutive quarterly declines.
9 Comments
My rates went up by 16% or about $1000 in hard folding bills, if inflation is only 3% then that implies I spend $33k and rates took the entire 3% rise or inflation....... hence we all call BS on your inflation numbers
- Insurance
- food
- power
- Rates
- School fees and uniforms
- club fees
- fuel prices
NO WAY are we really at 3%
Council rate increases are the biggest scam of 2025...
Seems fairly sound to me.
- costs have exceeded budgets for a couple of years
- new rates have to compensate for the higher expenditures, and councils will also now be front running future inflation
Still sucky. But also proof that you don't really own your own property, you're just leasing a right to live there from the council. And the lease can go up anytime.
Insurance profits up 90%.......
It feels that way, doesn't it.
It is important to differentiate between 'inflation' and 'cost of living'.or are we going to persist with the fantasy that the official 'inflation' number realistically reflects the later
if every kiwi took 5k out of savings and purchased an ounce of gold, the narrative would change...
If everyone stayed at home tomorrow and didn't go to work, it'd probably have a larger effect, and wouldn't cost billions of dollars.
That's more possible, but still super unlikely.
Those who wanted house prices counted in CPI (to slam the brakes on rises) all seem to have gone quiet.
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