Australia’s headline consumer price index (CPI) rose 1 per cent in the September quarter, reflecting an annual rate of 1.3 per cent.

Economists had been expecting prices to rise by 0.9 per cent in the September quarter and an annual rate of 1.2 per cent.

The most significant price rises were for electricity, which rose 11.4 per cent, petrol (up 4 per cent), financial products including deposit and loans which rose 3 per cent, and house purchases which rose 1.1 per cent.  

The greatest offsetting price falls were recorded for other financial services which fell by 2.3 per cent, vegetables decreasing by 5.6 per cent, fruit falling by 5.4 per cent, pharmaceuticals declining by 4.4 per cent and audio, visual and computing equipment falling by 2.2 per cent over the quarter.

The Reserve Bank has been warning that rates will rise in recent weeks and raised rates by 25 basis points earlier this month, adding $45 to the monthly repayments on a $300,000 mortgage.

Prior to today's inflation figures, Bloomberg reported that financial markets were betting the RBA would definitely raise its key cash rate by a quarter of a percentage point to 3.5 per cent in November, and that there was a one-in-four chance of a half-percentage point rise. The chance of a 50-basis point rise eased after the release, to just a one-in-ten chance.