Australian consumers had been struggling with higher prices of basic goods and services in the three months until the end of September as inflation rises 1.4 per cent, dampening the central bank's aggressive stance in slashing benchmark rates in the coming months.

Although, the inflation data bode well for the Aussie dollar for a moment as it hit $US1.0275 and above $US1.03 after the data was released, it has settled to $1.029 because expectations of another big rate cut has dimmed.

Data from the Australia Bureau of Statistics showed that inflation jumped 1.4 per cent during the period ending September, taking into account housing and apartment rents, electricity prices and additional food costs.

A 3.2 per cent rise in the cost of housing has been noted to take the biggest component of the index.

The Australian Housing Monitors showed in a separate report that median apartment rents climbed 0.2 percent while median weekly rents for houses rose 1.6 per cent in the three months ended Sept. 30.

The food and non-alcoholic drinks component, which is the second highest in the index at 16.8 percent, recorded a 1.9 per cent increase during the period.

The impact of the carbon tax made effective on 1 July has been strongly felt with the cost of electricity surging 15.2 per cent.

In a related interview by the Sydney Morning Herald with RBC Capital Markets senior economist Su-Lin Ong, she notes that the carbon tax has indeed moved the inflation faster than anticipated, but it is still within the central bank's target.

"There is clearly some impact from the carbon tax there, but the core measures, which strip out a bit of that, are also firmer. It's still well behaved, core inflation, but it is moving up a little bit faster than we anticipated and you'd have to argue that there is a bit more broad-based strength in prices," the economist tells Sydney Morning Herald's Chris Zappone.

She notes that this brings an argument into fore whether the market is going to question another rate cut on the cards.

Prior to the release of the inflation data, analysts had been anticipating another 75 basis points rate reduction next month as the Reserve Bank board directors meet during the Melbourne Cup Day.

A Bloomberg poll showed that the expectations for a rate cut had moderated to 50 basis points in November to take in the deepening inflation numbers.