The central bank may need a steep interest rate rise next week to chase down stickier-than-expected inflation.
All four of the big banks have revised their forecasts for future Reserve Bank of Australia rate decisions in the wake of the surprise jump in inflation for the September quarter.
Headline inflation hit 7.3 per cent last year - another 1.8 per cent quarterly lift - with a 7.1 per cent lift broadly expected.
The trimmed figure, which cuts away the fastest and slowest price moves, lifted 6.1 per cent - far above the RBA's target range of two to three per cent.
The new data from the Australian Bureau of Statistics suggests the RBA's job of taming inflation is far from over, with Westpac's team of economists anticipating the return to a 50 basis point hike next week.
The central bank pulled back to a 25 basis point hike when the board met last month on the basis that it had already hiked rapidly and wanted to give its earlier efforts a chance to take effect.
Westpac expects to see four more rate hikes - another 50 basis point lift in November, followed by three more 25 basis point lifts in December, February and March.
This will see the cash rate top out at 3.85 per cent.
Westpac's chief economist Bill Evans said it was particularly concerning to see inflation surging across most categories, suggesting inflation psychology was becoming entrenched.
"As this develops, businesses become more confident that they can raise their prices, consumers become more accepting of such action and see significant wage increases - in the context of tight labour markets - as necessary to compensate, sustaining the whole inflation process," he explained.
"Evidence from the survey that pricing power is becoming widespread across expenditure items should be of considerable concern to an inflation-targeting central bank."
He also said revelations that power prices are expected to surge, forecast in the federal budget, would keep the pressure on inflation psychology.
ANZ also expects the cash rate to peak at 3.85 per cent, and has pencilled in five more 25 basis point increases between now and May next year.
This many hikes would add $1059 to the average monthly repayment for a $500,000 mortgage, RateCity analysis shows. This is compared to May when the cash rate was still at record lows.
Commonwealth Bank expects two more 0.25 percentage point interest rate increases - one in November and another in December - to take the cash rate to 3.10 per cent.
NAB is forecasting four more 25 basis point hikes to take the cash rate to a peak of 3.6 per cent.
The bank's September quarter business survey, released on Thursday, revealed softening conditions for small businesses.
Business conditions remained well above historical averages, with conditions still strong among larger firms.
"Only the smallest firms are lagging, with conditions held down by softer employment in particular," NAB chief economist Alan Oster said.
Interestingly, confidence was also highest among small businesses.
"At the same time, confidence was highest for the smallest SMEs so they appear to be seeing better times ahead."
Small business conditions fell four points in the third quarter.
