Wellington - New Zealand's annual inflation rate reached 4 per cent in the 12 months ending June 30, sharply up from 3.4 per cent in March, according to official figures on Tuesday.

Soaring petrol and food prices were responsible for a 1.6-per-cent rise in the Consumers' Price Index (CPI) in the June 2008 quarter, the biggest increase in 18 years, Statistics New Zealand reported.

The cost of petrol rose nearly 26 per cent in the June year and food prices were up 8.2 per cent, the highest annual increase since 1990.

The statisticians said the last time the annual CPI topped 4 per cent was in 1995.

Soaring prices for dairy products fuelled the rise in food costs, with butter increasing nearly 90 per cent, cheese 62 per cent and milk 22 per cent. The cost of bread was up 15 per cent. (dpa)