Inflation rose to its highest level in two-and-a-half years as the rising cost of gasoline, healthcare and education took a toll on consumers.

The cost of living was 2.4 per cent higher in March than in the same month of 2016, according to the Consumer Price Index published by the Department of Statistics today.

That marked an increase of half a percentage point from the 1.9 per cent rate recorded in February and was the highest annual inflation rate since October 2014.

An increase in the cost of gasoline was a significant driver in annual inflation, causing a 4.2 per cent increase in the transport and foreign travel sector.

Education, recreation and entertainment costs rose 4 per cent from a year earlier, while the health and personal care sector saw price increases of 3.2 per cent.

Consumers paid 0.4 per cent more compared to February, with the biggest month-over-month increase in the fuel and power sector, in which prices rose 3.9 per cent, thanks chiefly to a 12.5 per cent increase in the fuel adjustment rate on electricity bills.

Airfares climbed 12.8 per cent in the month from February, but overseas accommodation costs fell 9.2 per cent, as the transport and foreign travel sector saw a 1.9 per cent increase in prices in March.

Food prices rose 0.4 per cent in March from the previous month. Lamb chops were up 6.6 per cent, fresh pineapples up 4.5

per cent and the price of ground spices rose 1.8 per cent.

Health and personal care costs were unchanged in March, as prices of prescribed medicines fell 0.7 per cent.

The all-items index rose to 102.5 in March. This means that the basket of goods and services that cost $100.00 in April 2015 now costs $102.50.