Canberra, Oct 25 (IANS): The Australian Bureau of Statistics (ABS) on Wednesday revealed that inflation hit 1.2 per cent between the start of July and end of September, marking an increase from the 0.8 per cent rise in prices in the previous quarter.

As it released Consumer Price Index (CPI) data for the September quarter,the Bureau said that on an annual basis consumer prices rose 5.4 per cent in the 12 months to the end of September, down from 6.0 per cent in the year to June, reports Xinhua news agency.

According to the state media Australian Broadcasting Corporation (ABC), economists had predicted the quarterly rate would come in at 1.1 per cent and the annual figure at 5.3 per cent.

The ABS said a 7.2 per cent increase in automotive fuel costs, 4.2 per cent increase in electricity prices and 2.2 per cent rise in rent prices were the biggest drivers of inflation.

Food prices also rose 0.6 per cent, the smallest quarterly increase in two years, ABS head of price statistics Michelle Marquardt said in a media release.

"Fruit and vegetable prices fell this quarter due to favorable growing conditions. Berries, grapes, and salad vegetables such as tomatoes, broccoli and capsicums drove the fall," she said.

Rising prices were offset by a 13.2 per cent fall in childcare costs due to changes in the government's Child Care Subsidy and falling domestic holiday travel and accommodation costs.

Marquardt said without the changes, which benefited over 1 million families, child care prices would have risen 6.7 per cent.