Cost of fruit and vegies drives up inflation

FRUIT, vegetables and domestic holidays drove Australia's inflation rate up 0.8% in the December quarter, the latest consumer price index figures show.

The Australian Bureau of Statistics data showed an 8.1% rise in fruit, a 7.1% rise in vegetables and a 6.9% rise in domestic travel were the biggest increases in the cost of living during the quarter.

Those rises came on the back of adverse weather conditions and a peak season rise in airfares and accommodation.

While fuel prices have gone up since December, a 1.1% fall in the cost of petrol and diesel was the biggest fall offsetting the increases.

The price of tobacco also rose 2.2% during the quarter, mainly due to a federal excise tax increase in December and previous rises in August.

While Treasurer Joe Hockey said in a statement that inflation "continues to be impacted by Labor's carbon tax", the ABS data did not report any significant rise associated with the tax.