Prime Minister Helen Clark and National leader John Key do not think record high inflation figures out today will impact on the Reserve Bank's decision on Thursday on whether to cut interest rates.

Annual inflation hit an 18-year high of 5.1 percent in the September quarter as predicted by economists. Food prices rose by 10.8 percent for the year ended September, the highest increase in 18 years.

Local authority rate increases and alcohol taxes have also added to inflation in the non-tradeable sector, which was up 1.3 percent in the quarter and 4.1 percent annually.

The tradeable component of the CPI, which shows the effects of international price and exchange rate movements, rose 1.9 percent in the September quarter and 6.3 percent for the year.

For the year, petrol prices rose 29.3 percent, accounting for just over a quarter of the annual movement. New house purchasing was up 4.6 percent, electricity up 6.9 percent, and housing rents up 3.1 percent.

Miss Clark was asked if voters would be concerned by the figures.

"Obviously the huge spike in oil prices had a major effect on New Zealand inflation figures, so we have to look through that. Also inflation this year was affected by the very high world food shortage and world food prices.

"I think the Reserve Bank and commentators will look through these figures."

Labour is planning to bring forward spending on infrastructure and has delivered tax cuts with more on the way next year.

Miss Clark did not think those measures would increase inflation.

She said if the fuel component was taken out of inflation the rate would have been 3.7 percent.

"Everyone recognises there has been a slowdown not just in our economy but in the world economy. The time is right for a Labour Government very focused on jobs as we are to be looking at what we can bring forward in the way of investment and infrastructure, what we can invest in education and training."

Mr Key said he thought inflation would come down again.

"I am confident inflation will come off over time, but it shows we need better economic management to get on top of our inflation rate," he told reporters.

Mr Key thought the Reserve Bank would cut interest rates on Thursday, "probably reasonably aggressively. I think he (Reserve Bank Governor Alan Bollard) will be of the view inflation has now topped out and we are in recession."

The Green Party today renewed its call for more policies to make the country less dependent on oil. Co-leader Jeanette Fitzsimons said better rail, public transport, and more energy efficient, medium density state housing close to improved public transport would reduce the need.

Also, insulating homes would reduce the demand for energy.

"Today's inflation figure of 5.1 percent shows the impossibility of controlling inflation by raising interest rates. Inflation is no longer just the result of economic boom-bust cycles but is driven by the fact that the world is reaching the limits of key natural resources," she said.