Shot to rate cut hopes as coffee leads inflation rise

The soaring price of coffee beans could be the reason home owners miss out on a Melbourne Cup day interest rate cut.

Australian Bureau of Statistics data released on Wednesday showed consumer prices rose 3.2 per cent in the 12 months to September, jumping out of the Reserve Bank's target band of two to three per cent for the first time in more than a year.

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 sa