GST has pushed inflation to a 16-year peak of 6.4 per cent.

The September RPI figures, released this morning, show that the 3% sales tax which started in May, as well as food and motoring costs, have driven inflation up. But the GST is a temporary effect on the RPI – accounting for 1.9% out of the 6.4% rise – and will drop out early next year.

The last time inflation touched the 6% mark was in March 1992, when  it was 6.8%. The latest figures do not include the recent 0.5% cut in interest rates, or the recent cut in fuel costs, which happened after the 12-month period.

Inflation minus mortgage payments hit 6.7%, and the new measure of RPI(Y) which removes mortgage payments, GST and Customs duties, was 4.9%. The figures released this morning cover the 12 months up to September. They show a 0.8% increase on the previous figures for the 12 months up to June.

Pictured: The latest RPI figure was announced at the press conference today