NZ raises cash rate as Iran war pushes up inflation

(Sharecast News) - New Zealand's central bank on Wednesday lifted interest rates to 2.75% as higher energy prices caused by the Iran war drove a spike in inflation. The widely-expected 25 basis point jump in the official cash rate - the second in succession - came after inflation that hit 4.1% in the June quarter.

Policymakers said the latest rise would cut the risk of having to raise rates by a larger amount later and were dovish on the future path of rates.

"Future policy decisions will depend on the (Monetary Policy) Committee's judgement of the balance of risks to medium-term inflation," the central bank said.

"After lacklustre growth in the June quarter, New Zealand's economic recovery has most likely resumed but remains uneven."

Reporting by Frank Prenesti for Sharecast.com