"We'll learn more about the Bank of England's thinking in a couple of weeks, but we can expect the calls for a rate rise to reduce to a whimper".
Economists had largely expected inflation to remain static in June - perhaps even hit 3% - as prices continue to feel the effects of weaker sterling since the Brexit referendum which has pushed up import costs.
United Kingdom inflation slowed for the first time in nine months in June, according to data published Tuesday by Britain's Office for National Statistics, sending the pound sharply lower against the US dollar.
As a result of the miss, the New Zealand dollar is getting thumped, falling 0.6% against the U.S. dollar to.7269 in recent trade.
This was 0.15 percent points lower than the rate recorded in May, which stood at 16.25 percent.
However, inflation is still running ahead of average wage inflation, which is now stands at 2% (excluding bonuses).
Wholesale prices were unchanged on the month, dampening future inflation pressures, although there was a 3.3% annual increase.
There was no inflation in the three months to June 30.
Russia's Elena Vesnina and Ekaterina Makarova win Wimbledon doubles title
Kubot and Melo outclassed 14th seeded Oliver Marach and Mate Pavic in a memorable final 5-7 7-5 7-6 (2) 3-6 13-11. The entire women's match was played indoors on the Centre Court grass.
"As the primary objective of monetary policy remains inflation control, any overshoot of inflation above the target can only be temporary in nature and limited in scope", Carney said on June 27.
The Reserve Bank had forecast in May that today's annual rate would come in at 2.1 per cent.
Petrol prices fell 1.9 percent on the quarter and were up 4.5 percent on the year.
Transport prices (down 1.3 percent) made the largest downward contribution this quarter. In May the bank said prices would grow by 0.3% in the second quarter.
The sharp fall in the value of the pound following the UK's vote to leave the European Union a year ago has raised the cost of imports and pushed up the rate of inflation. Household energy, which includes electricity, gas and solid fuels rose 1.5 percent on the quarter and 1.8 percent on the year.
The prices of some recreational and cultural goods and services, including data processing equipment and toys, also contributed towards the fall.
StatsNZ said that tradable prices - those impacted by global markets - rose by 0.9% over the year, overshadowed by a 2.4% lift in non-tradable (domestic influenced) prices over the same period.