Australian consumers are bracing for higher inflation in the year ahead, increasing chances of official interest rate hikes by the central bank to cap prices.

The Reserve Bank of Australia, which seeks to keep Australia's inflation rate between 2-3 per cent over the medium term to ensure sustainable economic growth, has flagged the need to lift rates to keep inflation in check as the country absorbs a swell of export revenue from the rekindled mining boom.

The Melbourne Institute Survey of Consumer Inflationary Expectations found the median expected inflation rate surged to 3.8 per cent in October, the highest level since April, from 3.1 per cent last month.

The proportion of respondents expecting prices to increase more than 10 per cent over the next year climbed to 11.9 per cent in October, from 7.6 per cent in September, the survey showed.

But not all respondents shared the same view, as the inflationary expectations of managers and professionals declined from 3.4 per cent to 3.3 per cent.

Meanwhile, the percentage of consumers tipping inflation to be within RBA's 2 to 3 per cent target band slipped from 19. per cent in September to 15.1 per cent this month.

Currently, the market forecasts a 31 per cent chance cash rates will climb to 4.75 per cent when the RBA board meets on November 2.

The Australian dollar jumped about a quarter of a US cent to a fresh 28-year high of 99.72 US cents after the release of the inflation survey.