The sharp rise in consumer price inflation was hurting lower-income families and people in Canterbury, Council of Trade Unions economist Bill Rosenberg said yesterday.
Statistics New Zealand figures showed the consumer price index, the official measure of inflation, rose 0.9% in the three months ended September, taking annual inflation to 1.4%, the highest reading since early 2012.
However, it was the eighth successive result below the Reserve Bank's midpoint in its 1% to 3% target range.
Mr Rosenberg said among the price increases for the year housing costs stood out.
''This is further confirmation of the need to treat affordable housing as an increasingly urgent need.''
Rapidly rising housing costs were hard for all households to adjust to but were a particularly large part of the expenditure of low-income households, he said.
Higher-income households tended to get more relief from low interest costs because they had higher mortgages. Petrol and, in the last quarter, vegetables were difficult costs for anyone to avoid, but low-income families were particularly affected.
Much of the inflation was occurring in Canterbury, which had a 2.3% increase in the CPI for the year, compared with 1.1% to 1.3% in the rest of the country, Mr Rosenberg said.
ANZ chief economist Cameron Bagrie confirmed sharp rises in food and fuel prices underpinned the lift in tradeable prices. Outside those areas, the competitive retail environment and the higher level of the New Zealand dollar continued to restrain overall price increases in the September quarter.
Price falls were evident for new and used cars, international airfares, apparel and communications.
In a survey of prices collected from retail outlets, Statistics NZ noted 15% of all quarterly items were discounted or ''on special'' in September. That was slightly above the 14% seen in both the June 2013 and September 2012 quarters.
''Viewing the distribution of price movements shows prices for 48% of items rose, 16% were unchanged and 37% fell - not substantively different from the last quarters, suggesting no immediate warning signs on the inflation front.''
The Reserve Bank would be wary of signs of firming in core inflation, Mr Bagrie said.
ANZ economists expected annual inflation to approach 2% by late next year.
A combination of demand and supply-side factors were responsible. With the economy strengthening, pockets of pricing pressure were likely to broaden, which would be the catalyst for official cash rate hikes.
Mr Bagrie expected the Reserve Bank to lift the OCR, from the current 2.5%, in March next year.
