New Zealand inflation hits 21-year high

Inflation in New Zealand has hit a 21-year high of 5.3 percent. Prices for food, airfares and housing were all up in the second quarter, according to the government agency Statistics New Zealand. The cost of vegetables, which are in short supply thanks to flooding in Australia's Queensland state, rose by nearly 7 percent in three months.
Part of the rise can be attributed to a 2.5 percent tax increase on all goods and services enacted by the New Zealand government last year. The news Monday pushed the kiwi dollar higher and close to a 26-year high of just over 85 cents to the US dollar. Investors see an increasing likelihood that New Zealand's central bank will raise its lending rate from 2.5 percent in an effort to counteract inflation.