A low-for-longer argument is expected from the Reserve Bank next week on the OCR.
Inflation figures out today have the CPI up half a percent, below the Reserve Bank's forecast of 0.7 percent.
Westpac chief economist Dominick Stephens thinks it will make for a dovish statement from Governor Alan Bollard.
"They'll indicate that inflation's slightly below their expectation, GDP was a bit weaker than expected and the exchange rate's still high so they'll be reiterating the message that the OCR is on hold for the time being."
Mr Stephens says there were two large and surprising falls in prices - books fell 14 percent and package holidays fell 11 percent.
He thinks in neither case the pace of decline is likely to be sustained.
"If you look at some of the trend in inflation it was slightly stronger than we were expecting, and in particular housing related things seem to be going up in price."
Mr Stephens says the overall figures were largely expected, so there's been no market reaction to the results.
The Consumer Price Index rose 0.5 percent last month, in line with market expectations.
Much of that was due to a sharp rise in the cost of cigarettes.
If that's removed, the CPI rose only 0.2 percent.
Photo: NZ Herald