Don Brash: Inflation: Are we out of the woods yet?

The last time inflation was over 7% was more than 30 years ago, and I was responsible for doing what Adrian Orr, the current Governor of the Reserve Bank, is trying to do now: get inflation back to the target mandated by the Minister of Finance, in my case within a 0 to 2% range, and Mr Orr’s case within a range of 1 to 3%.

A few weeks ago, there was at least some cheering when the inflation figure for the year to September was announced: it showed that the Consumer Price Index – which is how most people think of inflation – had risen by just 7.2% in the 12 months to that month, down fractionally from an increase of 7.3% for the 12 months to the end of June. Perhaps at last inflation was slowing and we could look forward to the Reserve Bank easing off the brake of steadily rising interest rates.