New Zealand's Consumer Price Index (CPI) increased by 1.5 per cent between July and September, taking the annual inflation rate to 5.1 per cent. This is the highest the cost of living has been in New Zealand in 18 years.

This confirms previous forecasts by Treasury and private sector economists on the increase of the cost of living in New Zealand.

Transport costs in New Zealand rose 11.3 per cent for the 12 months to the end of September. Higher prices for petrol contributed to one quarter of the CPI increase.

The other major annual increase came from the food group (up 9.5 per cent), with grocery food climbing 12  per cent.

The US and UK posted similar annual increases of 4.9 per cent and 5.2 per cent respectively. Australia's CPI rose 1.2 per cent over the same period, representing an annual increase of 5 per cent.

For further information visit the Statistics New Zealand website.