Nicola Willis calls this good news for those with mortgages
Nicola Willis, New Zealand’s finance minister, has welcomed the drop in domestic inflation as “good news for people with mortgages,” who may potentially see mortgage rate reductions and a lower cost of living.
According to Willis, the economic data suggesting a decline in domestic inflation and spare capacity in the economy point toward the possibility for further rate reductions in the months ahead.
“Further drops in coming months will reduce cost of living pressures on households, free up cash to be spent in local businesses and encourage investment and growth,” Willis said in a news release of the New Zealand government.
This decline in domestic inflation is in line with the government’s steps to restore discipline to public expenditure and thus decrease inflationary pressures, Willis added in the news release.
“Lower inflation and interest rates set the foundations for economic growth, and the investment, jobs and incomes it creates,” Willis said in the news release. “The benefits of restoring discipline to public spending are starting to flow through to people’s bank accounts.”
As per Stats NZ, inflation was at 2.2 percent in the year to December, which is the second consecutive quarter that the annual rate has fallen within the one-to-three percent target band of the Reserve Bank, Willis shared in the government’s news release.
The statistics provided that non-tradables, which are the domestic component of this inflation, decreased to 4.5 percent in the year to December from 4.9 percent in the year to September, Willis added in the news release.
The Reserve Bank recently released data revealing that the average interest rate paid on residential mortgages declined last November, which marks the first time this has happened since September 2021, Willis said in the news release. The Reserve Bank governs decisions about the official cash rate, she noted.