Annual inflation was unchanged at 7.2 per cent in the three months to the end of December, Stats NZ has announced.

The annual movement in the consumer price index had also previously been measured at 7.2 per cent in the September quarter, after peaking at a 32-year high of 7.3 per cent in the June quarter.

Most bank economists had been expecting inflation to slip back slighty to 7.1 per cent, though the Reserve Bank had forecast in November that it would hit a fresh high of 7.5 per cent and ANZ had tipped it would remain unmoved at 7.2 per cent.

Higher food prices, airfares and stubbornly high house construction costs were largely responsible for keeping inflation running hot.

Stats NZ reported that grocery food prices were up 10.2 per cent over the year, and 'passenger transport services” were up 12.6 per cent, driven by steep increases in both international and domestic airfares which were up 14.1 per cent and 18.9 per cent respectively over the quarter.

Kiwibank senior economist Jeremy Couchman said there were some positive signs.

'Headline inflation remains uncomfortably high, however there are signs we are past the peak in the current cycle. Cost of construction is starting to come back which is consistent with a housing market that is cooling pretty rapidly.”

But Infometrics principal economist Brad Olsen said it was concerning that the latest figures showed inflation was very broad based, with 72 per cent of the items tracked by Stats NZ rising in price, which he said was the second highest on record.

'It is the sustained broadness in inflation that is worrying and says we haven't done enough yet.”

Although annual inflation was unchanged, the quarterly increase in prices was the lowest since the December quarter last year at 1.4 per cent and down from a 2.2 per cent jump in the September quarter.

So called tradeable or 'imported” inflation, which is the rise in prices of goods and services that are largely priced overseas and determined by international factors, came in at 8.2 per cent over the year, while non-tradeable inflation was 6.6 per cent.

That mix was little changed on the September quarter, meaning domestic inflation became no less of an issue.

New Zealand's inflation rate is not out of line internationally.

Annual inflation was last measured at 7.3 per cent in Australia, 6.5 per cent in the United States, 10.5 per cent in the UK and 10.3 per cent over the OECD as a whole.

- Tom Pullar-Strecker/Stuff.