- Due 1045 - 1145 (NZDT) Jan 20, 2145 - 2245 (GMT) Jan 19
WELLINGTON, Jan 18 (Reuters) - New Zealand is expected to report muted fourth quarter consumer price inflation figures on Wednesday, adding to the view that the central bank might cut interest rates again - although it will still be keeping a close eye on the housing market.
A Reuters poll found analysts' median expectation was for Wednesday's data to show annual consumer price inflation at 0.4 percent in the fourth quarter, while it was tipped to fall 0.2 percent quarter-on-quarter.
Weak data could mean inflation undershooting the central bank's forecasts for the first quarter of this year, pointing to a "slower rebound" back into the central bank's 1 percent to 3 percent target range, said BNZ Head of Research Stephen Toplis.
"A further delayed return of headline CPI inflation to within target band (let alone the 2 percent mid-point of it) may add to the perception that the bank needs to cut its official cash rate even further," he said.
He added, however, recent data pointing to "serious momentum" in housing markets across the country "will remain a prickly area for the RBNZ".
The Reserve Bank of New Zealand (RBNZ) cut interest rates by a quarter percentage point to 2.5 percent in December but virtually shut the door on further easing, saying it expected to achieve its 1 percent to 3 percent inflation target without more monetary stimulus.
The RBNZ has long been concerned about rising house price inflation in the largest city of Auckland and news that prices outside the city may also be rising quickly would be worrying.
ASB Bank Chief Economist Nick Tuffley, however, said persistently weak inflation pressures would still prompt two further 25 basis point cuts in the official cash rate from mid-2016.
He tips annual inflation to be 0.3 percent in the fourth quarter, noting weak fuel prices means CPI will not move back over 1 percent until the second half of the year.
"Consequently, inflation is likely to remain below the RBNZ's target band for around 2 years," he said.
