Even so, the 5pc annual consumer price inflation rate in the September quarter is unlikely to sway the Reserve Bank from cutting interest rates again next month as it worries more about a stalling economy, analysts say.

The inflation spurt compares with an annual rate of 4.5pc for the June quarter.

Analysts had tipped an inflation rate of 4.8pc, according to a Bloomberg survey.

"I suspect it marks the peak in inflation for this cycle, so for policy I don't think it's going to stop further rate cuts from the RBA," said RBC Capital markets senior economist Su-lin Ong.

The increase - excluding the aftermath of the introduction of GST in 2000-01- is the most since the December 1995 quarter, according to the Australian Bureau of Statistics.

The Australian dollar jumped about a quarter of a US cent, and traded recently at about US 68 cents. The share market was littled changed.

The price spike also set a new record for the RBA's own twin measures of inflation - which came in at an average 4.7pc for the September quarter, up from 4.4pc in the June quarter. The inflation level is already well beyond its 2-3pc target range.

According to the ABS, financial and insurance services cost 9.5pc more in the September quarter from a year earlier, the biggest increase in the groups it tracks.

Transportation costs were 8.7pc higher, while housing rose 6.8pc. Food prices rose 3.4pc from a year earlier.

On a quarterly basis, inflation rose 1.2pc, down from the 1.5pc increase in the June quarter, but more than the 1pc tipped by economists.