Westpac tips 3.7%, Kiwibank 4.0% ahead of 22 October inflation data
New Zealand petrol prices rose 6.4% and diesel 7.8% in September 2026, according to Stats NZ’s latest selected price indexes, pushing fuel costs higher ahead of next week’s inflation data. Kiwibank noted oil prices spiked again at the end of the month.
Over the year, petrol is up 24.3% and diesel 55.8%. Food prices were flat for the month and up 2.4% annually, while electricity is 9.5% higher than a year ago. Rents were subdued, with the flow measure up 0.3% for the month and 0.9% over the year.
Economists split on the quarterly result
The monthly figures feed into the September-quarter consumers price index (CPI), due on 22 October, and economists are divided on what it will show. Westpac expects annual inflation to fall to 3.7% from 4.1%, while Kiwibank expects it to hold at 4.0%. The Reserve Bank (RBNZ) forecast 3.9% in its September Monetary Policy Statement.
The difference comes down partly to timing. Despite September’s jump, Westpac’s CPI preview estimates the September-quarter average price of 91 unleaded was around 6% lower than in the June quarter, when the Middle East conflict sent prices sharply higher, with diesel close to 16% lower. Together, those falls take an estimated 0.4 percentage points off quarterly inflation.
Westpac senior economist Satish Ranchhod said the expected fall in annual inflation is “likely to be just a temporary reprieve”, and forecast inflation would climb back above 4% before the end of the year.
Rate call hinges on core inflation
Beneath the headline number, Westpac’s economists expect measures of core inflation to rise, with domestically driven non-tradables inflation forecast to lift to 3.6%.
Kiwibank’s economists noted that businesses want to lift prices but are being held back by stretched household budgets. As they put it: “It’s hard to hike prices when consumers simply walk away.”
The CPI result lands six days before the RBNZ’s 28 October official cash rate (OCR) review, and the two banks differ on what comes next. Westpac expects the OCR to stay on hold, although the bank notes markets are pricing in a roughly 66% chance of a 25-basis-point hike. Kiwibank expects one more increase this year, in either October or December, and says the strength of core inflation will be key.
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