According to the governor's assistant, the RBNZ is surprised by the steady inflation

Governor's assistant Karen Silk said that New Zealand's central bank did not expect such strong inflation. It caused price expectations to rise, requiring more aggressive measures to fight interest rates.

On Monday, Bloomberg interviewed Silk in Wellington. She said therein that actual inflation continues to rise and surprise, but inflation expectations also rose. “And it’s the persistence factor that has probably been the most surprising.”

Last week, the Reserve Bank's official interest rate rose to 4.25%. The 75-basis point increase was the largest since the OCR was introduced in 1999. The benchmark rate is predicted to reach 5.5% next year to bring inflation back to its initial target of 3%. Central banks in some countries are looking for slower rate increases as the risks of a global recession increase.