We could see our interest rates rise sooner than we hoping for, after the latest increase in inflation

Inflation's reached 3.1 percent - well above the Reserve Bank's forecast of 2.7.

The central bank had been expected to keep the OCR on hold for most of this year - while the economy and labour market continued to recover.

But ASB Senior Economist Mark Smith says further hikes, this year, are now becoming increasingly likely.

He says if inflation fails to cool as much as the Reserve Bank is hoping for, the Official Cash Rate is likely to be raised higher.