Inflation with stagnation

<p>Kia ora,</p><p>Welcome to Monday's Economy Watch where we follow the economic events and trends that affect New Zealand.</p><p>I'm David Chaston and this is the International edition from Interest.co.nz.</p><p>Today we lead with news sharply rising commodity prices are being caused by shortages that are undermining economic activity. Inflation with stagnation.</p><p>First up today, the <a href="https://www.mining.com/markets/commodity/copper/" target="_blank"><strong>price of copper</strong></a> is taking off again. Its price hit a record high at the end of last week as surging power prices threaten to curb supply at a time when stocks are at rock bottom. The crunch will hurt China the most, as it consumes more than all other countries combined. However, it controls little production and is on <a href="https://www.mining.com/charts-chinese-investment-in-overseas-copper-projects-just-beginning/" target="_blank"><strong>a fast hunt</strong></a> for supplies it can control, especially in Africa.</p><p>And the <a href="https://tradingeconomics.com/commodity/zinc" target="_blank"><strong>price if zinc</strong></a> has risen a spectacular +30% in the past ten days. This is caused by sharply rising European power prices which are forcing smelters to shut down.</p><p>Prices are in focus this week. Today the New Zealand CPI data will be released for Q3 and it is expected to show prices rising north of 4% and an annual rate, and maybe at a 5.3% annualised rate in Q3.</p><p>Then China will reveal its Q3 economic growth rate. Commodity prices, supply-chain problems, Evergrande and Delta all may have an impact on the quarter's result.</p><p>The northern hemisphere winter is approaching and every country from China to the US is struggling with high energy costs that will sharply raise the costs of winter heating this year. In the US, <a href="https://www.eia.gov/outlooks/steo/" target="_blank"><strong>a new analysis</strong></a> shows that those using heating oil will pay more than +40% more than last year; those using prop