Both Labour and National are quickly jumping to comment on the newly reported inflation statistics reported today.

Statistics New Zealand reported today inflation is barely budging at 7.2 per cent for the September quarter, with the last quarterly report being 7.3 per cent at the end of June.

The Reserve Bank had expected a much larger drop in annual inflation to 6.4 per cent, and no bank economists had been expecting inflation to top 7 per cent this time.

Statistics New Zealand add steep prices in housing, construction, international airfares and vegetables have largely offset the relief provided by falling petrol prices.

Finance Minister Grant Robertson says inflation has 'eased slightly” after the 0.1 per cent drop amid the "volatile global environment".

Finance Minister Grant Robertson. Photo: RNZ.

'Inflation is continuing to be heavily influenced by global factors, with the Ukraine war and pandemic related supply constraints affecting fuel and imported food and building material prices,” says Finance Minister Grant Robertson.

'Food price rises of 8 per cent for the year were not only influenced by global prices but also by severe weather events that affected growing conditions. Vegetable prices in the quarter rose 24 per cent.

'The Government will continue to carefully target spending in these highly uncertain times. This is not the time to put that at risk by borrowing for tax cuts that benefit the waelthiest the most, as we have recently seen in the UK.

'This is why we aren't spending the money saved on the deficit last year and tracking a path carefully back to surplus.

'Inflation globally is high, with forecasts showing other countries' consumer prices are yet to peak. Australia is forecast to rise to 7.75 per cent by the end of 2022.

'Inflation is running near 10 per cent in the UK, over 9 per cent in Europe and over 8 per cent in the US. New Zealand is at the lower half of the pack in the 38-nation OECD.

'We have taken action to take the sharp edges off cost of living pressures on Kiwis, particularly those on lower incomes.

'Our temporary and targeted cost of living payment, fuel tax cuts and halved priced public transport fares have helped ease the inflationary effects of the Ukraine war and supply chain disruptions.”

Robertson adds New Zealand 'cannot escape” the global pressures affecting prices at the pump, supermarket and the hardware store but we find ourselves positioned 'well to respond”.

'Unemployment is near a record low, the economy is bigger than ever before Covid-19, the world wants goods and services we produce and the Government's books are among the world's best, with debt at levels below those of the countries we compare ourselves with.”

The National Party spokesperson for finance Nicola Willis says inflation has become 'embedded” into the economy 'under Labour's watch”.

National Party finance spokesperson Nicola Willis. Photo: RNZ.

'Inflation data for the September quarter released this morning by Statistics New Zealand shows prices rose 7.2 per cent per cent in the past year, almost a full per centage point higher than the Reserve Bank expected,” says Willis.

'Runaway prices are making a mockery of Labour's claims of a strong economy. In reality, out of control inflation means most Kiwis will be poorer tomorrow than they were today.

'These inflation figures are much worse than even the most pessimistic predictions, and make the Reserve Bank's hopes of a slow-down look wildly out of touch.

Willis says the bottom line is New Zealanders must yet again brace for more pain in their back-pockets.

'Perhaps most worryingly, domestic inflation rose to 6.6 per cent, the largest rise since Stats NZ began the measurement.

'Widespread labour shortages and elevated Government spending is lighting a fire under inflation, but the Government still won't fix its broken immigration settings or impose fiscal discipline. Labour is spending $1 billion more a week than when they entered office, pumping cash into the economy with too few results to show for it.

'Not only are Kiwis paying at the eftpos terminal, they are increasingly paying for Labour's economic mismanagement with each and every mortgage payment.

'Kiwis deserve a real economic plan to get inflation under control, not just more spending.

'Ministers must do more than close their eyes, block their ears and pretend this is all driven by events overseas. They must act.”

Inflation recorded at 1.4 per cent in September 2020, 4.9 per cent in September 2021. Photo: File/SunLive.

ASB says it expected the Reserve Bank to raise the official cash rate by 75 basis points to 4.25 per cent next month and now forecasts the OCR will reach 5.25 per cent next year.

ANZ is now forecasting a 75bp rise in both November and at the Reserve Bank's first meeting next year, which would take the OCR to 5 per cent by February.

Westpac, which was the closest of the banks after predicting of a 6.9 per cent rise in prices, says there were some unusual price movements, including a large rise in the price of airfares, but said the data showed price pressures were widespread across both domestic-produced and imported goods and services.

Infometrics economist Brad Olsen describes the latest inflation figures as 'alarming”.

Interest rates would need to move higher and faster to combat pervasive pricing pressures across the domestic economy, he says.

'There is no question now that the official cash rate will rise further, and the Reserve Bank will need to weigh up how to get stubborn inflation under control,” he says.

'A 75 basis point rise in November is now a leading option for the bank.”

That would take the official cash rate to 4.25 per cent.

- Additional reporting by Tom Pullar-Strecker/Stuff.