An economist thinks a larger than expected increase in living costs could prompt the Reserve Bank to raise interest rates sooner.
Statistics New Zealand figures show the consumer price index climbed 1.3% in the September quarter, mainly because of higher food prices and airfares.
Economists had expected a rise of 0.8%.
Vegetables were the biggest contributor to the 1.7% rise, while airfares rebounded by 11% after big falls in the previous six months.
The rise of 1.7% on a year-on-year basis is also considerably bigger than the 1.2% many economists had predicted.
A senior economist at UBS, Robin Clements, says many of the drivers of the rise, like alcohol prices, local authority charges and vehicle relicensing fees, weren't market-related but the result of government decisions.
But he thinks it could lead the Reserve Bank to raise interest rates earlier and faster than it otherwise would have done.
Radio New Zealand's economics correspondent says that the annual rate of 1.7% - the lowest in five and a half years - is still well within the Reserve Bank's target of 1% to 3%, but that the quarterly increase was substantially above the bank's expectations.
The dollar jumped 0.5c on expectations that the Official Cash Rate would be raised earlier than the end of 2010. It was set at 2.5% on 30 April after previously being 3%.
