ASB Bank expects inflation fall

The ASB bank expects that Friday's CPI figures will show a fall in annual inflation to 3.1 per cent in the first quarter.

The bank says food, tobacco excise, education and housing costs have risen but have been offset by weaker transport costs.

It says lower petrol prices after last year's spike, remain a significant factor driving down inflation in the short term and the Reserve Bank will have little need to worry about high inflation this year.

The ASB says in the wake of the weaker business confidence survey carried out by the NZIER and tighter monetary conditions a 50 basis point cut to the official cash rate later this month would not be unreasonable. It believes the OCR could eventually reach a low of two per cent

- NEWSTALK ZB