Yesterday's data showing annual inflation at 7.3 per cent was ugly.
It was slightly worse than expected - economists had forecast it to land at 7 or 7.1 per cent.
But the data is backward looking, taking us to June 30. The big questions for economists now are: has it peaked?
And how high will interest rates have to go to get on top of it?
The good news is that there are signs that it may have peaked - although economists are cautious about hard and fast forecasts, given the volatility of international oil and commodity markets.
The bad news is that it looks like the cost of living crisis will be with us for some time yet as they don't see a quick return to more normal levels of inflation until next year at the earliest.
And the only way to ensure we get on top of it is going to be with more interest rate hikes and a tough economic slowdown.
The data showed domestic inflation pressure is strong and more aggressive hikes by the Reserve Bank will be required.
"We think annual CPI inflation has likely peaked, but this is still uncertain," said ASB senior economist Mark Smith.
But he warned that record high annual non-tradeable inflation will be of concern to the Reserve Bank.
Non-tradeable inflation is the domestically driven component of inflation.
"Unless labour market pressures concertedly ease, current high inflation outcomes run the risk of being increasingly entrenched," Smith said.
Non-tradeable inflation came in at 6.3 per cent, the highest level since the StatsNZ series began in 2000.
Tradeable inflation (which measures goods and services that are influenced by foreign markets) was still the largest component at 8.7 per cent in the year to the June 2022 quarter.
Since the start of July there have been some positive signs in international commodity markets with oil prices falling back to around US$100 a barrel.
Shipping costs have continued to ease.
Marcel Thieliant, senior Australia & New Zealand economist with Capital Economics, also said he thought inflation had "probably peaked".
"With all measures of underlying inflation still rising, the RBNZ will surely keep hiking interest rates aggressively over the coming months," he said.
"However, we suspect that consumer prices will rise a little less strongly in [the third quarter] than the massive 2.2 per cent jump in [the third quarter] 2021.
"If we are right, inflation has now peaked and we still expect the housing downturn to weigh more heavily on activity before long, eventually forcing the RBNZ to stop tightening policy."
Westpac senior economist Satish Ranchhod said the strong rise in inflation across the board suggested the cost of living crisis would be with us for some time yet.
"With widespread pressure on operating costs, we expect that inflation will remain elevated over the remainder of this year," he said.
"In fact, we aren't forecasting a return back within the RBNZ's target band until the middle of next year at the earliest. That signals an ongoing squeeze on households' purchasing power."
What had really lit a fire under consumer prices has been the strength of domestic demand, Ranchhod said.
"Indeed, if we look at the areas where businesses are reporting significant shortages of supplies, they're predominantly in areas where demand has been strong, like the construction sector," he said.
Prices for the construction of new dwellings increased by 18 per cent in the June 2022 quarter, compared with the same period last year.
"That is a big concern for the RBNZ, because if demand is running hot, inflation is likely to remain elevated even when the current pressure on operating costs (eventually) eases off," he said.
And a key factor underpinning the strength of household demand has been stimulus from low interest rates.
The strong data prompted ANZ to lift its OCR call.
"We have changed our OCR call and now expect the run of 50bp hikes to continue through to November, meaning an OCR endpoint of 4 per cent rather than 3.5 per cent," said ANZ economist Finn Robinson.
"A 75bp hike at the August MPS is a very real possibility, particularly if the labour market data on August 3 delivers another hawkish surprise."