Annual inflation has hit 6.9 per cent for the year to March 31, the largest movement since a 7.6 per cent annual increase in the year to the June 1990 quarter, StatsNZ said today.

The figure was lower than some economists had feared with forecasts of up to 7.4 per cent.

The New Zealand dollar fell by just over a quarter of a US cent to US67.86c in the minutes after the CPI's release. Bond yields were unchanged.

The quarterly inflation rate was 1.8 per cent.

Food prices rose sharply in the quarter, up 3.1 per cent, influenced by fruit and vegetables (up 9.3 per cent) and grocery food (up 2.4 per cent).

Housing and household utilities rose 1.8 per cent, influenced by home ownership (up 3.5 per cent) and actual rentals for housing (up 1.1 per cent).

Transport rose 3.3 per cent, influenced by private transport supplies and services (up 6.6 per cent) and partly offset by a fall in passenger transport services (down 9 per cent).

The 6.9 per cent annual increase follows an annual increase of 5.9 per cent in the December 2021 quarter.

Across the annual period the most significant contributor increase in the CPI between was housing and household utilities, which increased 8.6 per cent.

The area within housing and household utilities that contributed the most to this increase was purchase of housing, up 18 per cent. Actual rentals for housing also contributed to this increase, up 4 per cent.

Transport was the second most significant contributor to annual inflation, up 14 per cent.

The largest driver of this was a 32 per cent increase in petrol price.