Australia's trimmed mean inflation of 0.2% in August came in slightly lower than expected, but is still consistent with a forecast for third-quarter underlying inflation to print at 1%, ANZ said in a Wednesday report.

"We'd view such a quarterly number as being a material upside surprise relative to the forecasts in the Reserve Bank of Australia's August statement on monetary policy," ANZ said. "And so we still think another rate hike at the November meeting, taking the cash rate to 4.85%, is more likely than not."

The expected upside surprise on inflation, combined with higher energy prices, would likely warrant an upward revision to the central bank's inflation forecasts too, ANZ added.

It noted that despite the lower-than-expected August trimmed mean reading, three- and six-month annualized monthly core inflation readings are running well above the target band.

The largest price increase in the month was in automotive fuel, which was no surprise given the end of a discounted fuel excise levy. There will probably be another large increase in the expenditure class in September as petrol prices at the pump have increased, ANZ said.