The Consumer Price Index rose 0.7 of a percentage point in the September quarter, compared with a rise of 0.4 of a percentage point in the June 2016 quarter.
On an annual basis, CPI increased 1.3 per cent over the 12 months to the September quarter, compared with a rise of 1 per cent over the 12 months to the June quarter.
While the inflation numbers were higher than expected, CPI is still well below the Reserve Bank of Australia's target band of 2-3 per cent.
Commenting on the numbers, AMP Capital chief economist Shane Oliver said the September quarter inflation result was "probably not low enough overall to trigger another rate cut from the RBA at next week’s Board meeting".
"Both headline and underlying inflation are in line with the RBA’s inflation forecasts and the rise in headline inflation may reduce the short term downside threat to inflation expectations," Mr Oliver said.
"At the same time, economic growth in Australia looks reasonable with the worst of the mining investment slump behind us and a rise in commodity prices set to boost growth in national income.
"As such, the RBA can afford to be patient in waiting for inflation to head back to target and thereby avoid the risk of adding to financial instability (read a further acceleration in Sydney and Melbourne home price gains) with another rate cut for now."
That said, inflation is "still very low" and it is not clear at all that it has bottomed yet, Mr Oliver said. In addition, the Australian dollar is "uncomfortably high" at 77 US cents at the time of writing.
"Overall, we think that the RBA will leave rates on hold when it meets again next week, but that another cut (more likely next year) cannot be ruled out," Mr Oliver said.
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