Central banks tend to fight inflation by raising interest rates - this tends to slow the flow of money around the economy and bring prices down.
But fuel prices rose by 15 percent year-on-year in March, with more hikes expected next month.
"News today that inflation has exceeded 2.2 per cent means that interest rates in New Zealand are set to rise, hitting young home buyers", says Mr Seymour.
New Zealand's consumer prices increased by 1.0 percent quarter-on-quarter in the first quarter of 2017, up from 0.4 percent rise in the previous period.
Some of the more volatile components have been important in pushing headline rates higher in recent quarters, though various measures of underlying inflation have also quickened. "The RBNZ's February forecasts assumed inflation wouldn't be back at these sort of levels until 2019", Westpac Research commented in its latest report.
Housing prices continued to increase, and were up 3.3 per cent in the March 2017 year, with newly built houses up 6.7 per cent, and rentals up 2.3 per cent.More news: Madrid clubs back on top in European soccer
Petrol prices rose 4.1 percent in the quarter and were up 12 percent on the year.
"The labor cost index rose only 1.6 percent in the year to December and the average wage only 1.3 percent", said Rosenberg.
Food prices were boosted by stronger prices for apples and milk, both of which were seeing strong worldwide prices, which could push up demand locally.
The higher-than-expected inflation added to the view that the central bank may move to lift interest rates sooner than it is forecasting.
Local body rates were up 0.1 percent on the quarter and were up 3.2 percent on the year while refuse disposal and recycling was up 2.2 on the quarter and 6.2 percent on the year. Non-tradeables inflation, which focuses on domestic inflation, rose 1 percent on the quarter and was up 2.5 percent on the year.
Tradeables inflation, which includes goods and services that compete with global rivals, rose 0.8 percent in the quarter and 1.6 percent on the year.