Prices unexpectedly fell by 0.2 per cent during the December quarter, said Statistics NZ this morning, taking the annual rate of inflation to just 0.9 per cent. Seasonal falls in vegetable prices helped push the CPI down.

New Zealand's economy surged in the December quarter to the best level since mid-2007, according to the latest Quarterly Survey of Business Opinion.

The New Zealand dollar rose against the greenback, even as US stocks fell, in what may be a run of safe-haven buying that's also lifted the Australian dollar.

The New Zealand economy grew at a slower pace than expected in the September quarter, pushed up by increased building activity.