Shot to rate cut hopes as coffee leads inflation rise

Driving the spike were strong increases in the cost of education, health, housing, alcohol and tobacco.

Underlying or trimmed-mean inflation, the Reserve Bank's preferred measure which strips out more volatile price movements, also ticked up from 2.7 per cent to three per cent.

Economists believe the sharp rise in consumer prices has all but ruled out a cut in interest rates when the Reserve Bank meets next week, and CommSec now says the RBA has finished cutting rates for the foreseeable future.

Commsec chief economist Ryan Felsman said a surprising feature of the inflation data was a massive increase in the price of coffee.

While inflation for food and non-alcoholic drinks held steady at three per cent, prices for coffee, tea and cocoa shot up 14.6 per cent.

This was largely driven by bad weather in the coffee bean powerhouses of Brazil and Vietnam, along with US President Donald Trump's tariffs, Mr Felsman said.

"Those underlying commodity prices are then translated into higher prices at grocery stores for some of those goods," he told AAP.

Yearly increases in alcohol and tobacco tax also played a part in the strong figures.

As analysts and mortgage-holders reel from the hotter-than-expected inflation reading, Treasurer Jim Chalmers has given a key speech to business leaders outlining the government's next steps towards economic reform.

Dr Chalmers flagged changes to the superannuation performance test, a set of rules that hold super funds accountable for the returns on their investments.

The government has previously raised concerns the test might be stifling investment in certain asset classes such as housing and clean energy.

"We're open to considering responsible changes that maintain very high standards and the super funds' responsibilities to members," he told the Australian Chamber of Commerce and Industry's gala dinner on Wednesday night.

Labor will consult with the super industry and experts before introducing any reforms to the test.

Dr Chalmers has also indicated his midyear economic update, expected to be handed down in December, will not contain many new policies.

"The midyear update will be precisely that - an opportunity to update forecasts and the fiscal position," he said.