Consumer prices have risen 1.2 percent in the first three months of the year, driving food and housing costs, with the annual inflation rate falling to 6.7 percent, well below expectations.

Stats NZ said the main drivers of the latest increase were high food prices, and construction and rent increases.

RNZ's business editor said the strength of the underlying pressures meant the Reserve Bank was likely to increase the official cash rate again next month.

The previous Consumers Price Index released in January showed prices up rose 1.4 percent for the three months ended December, an annual inflation rate of 7.2 percent.

Food price inflation has been in double figures for months, and recorded a 12.1 annual increase in the year to March, the biggest jump since 1989.

The rising cost of living is already causing many New Zealanders to experience a serious financial pinch.

More to come...

Main image: RNZ/Richard Tindiller