CPI rises 0.5 pct in Q3 Annual rise of 1.9 pct Data beats...

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    • CPI rises 0.5 pct in Q3
    • Annual rise of 1.9 pct
    • Data beats expectations, NZ dollar rallies

    (Recasts, adds market reaction)

    WELLINGTON, Oct 17 (Reuters) - New Zealand's consumer price index (CPI) jumped 0.5 percent in the third quarter, surpassing expectations on the back of rising housing costs, official data showed on Tuesday.

    The CPI grew 1.9 percent on an annual basis, according to figures from Statistics New Zealand, beating analysts' expectations for a 1.8 percent rise.

    Analysts had been expecting the CPI to increase 0.4 percent in the three months to the end of September, after being flat the previous quarter.

    The announcement sent the New Zealand dollar to a two-week high of $0.7197, up from around $0.7178 before the release. The currency then gave up some of its gains, settling around $0.7190.

    The annual price growth was well above the 1.6 percent predicted by the Reserve Bank of New Zealand (RBNZ) in August.

    However, analysts had said the bank was unlikely to waiver from its determination to keep interest rates at record lows for years while the bank waited for previously-tepid inflation to stabilise around 2 percent.

    "Collectively, housing-related costs had the largest upward contribution in the September 2017 quarter, slightly offset by falls in transport prices," the country's statistics agency said in a statement.

    Rents rose 2.2 percent compared to the same period the previous year, while construction of new homes soared 5.3 percent.

    New Zealand's booming population, stoked by record net migration, has created strong demand for housing in the past few years.

 
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