Price rises associated with travel and home ownership were offset by falling fruit and vegetable and rent costs in October, according to a new survey.
The TD Securities-Melbourne Institute inflation gauge rose 0.1 per cent in October, following a similar rise in September, the survey revealed.
In the year to October, the inflation gauge rose 2.6 per cent, compared with 2.8 in the 12 months to September.
Both figures are at the upper end of the central bank's two to three per cent inflation target band.
The rises were mainly due to increases in the price of travel and accommodation, as well as new dwelling purchase and fuel, the survey showed.
They were offset by falls in fruit and vegetables, rents and furniture.
Fruit and vegetable prices fell 4.8 per cent in October, after a 5.6 per cent fall the previous month. Rents fell 1.1 per cent in October, compared with 0.5 per cent in Septamber.
TD Securities head of Asia-Pacific Research Annette Beacher said she had expected this month's figures to show an easing of price rises.
"Our TD Inflation Gauge predicted well ahead of the official release that September quarter inflation took a breather after what was a robust rise over the first half of this year," she said in a statement on Monday.
Ms Beacher said the shift in trend would be a talking point at Tuesday's Reserve Bank of Australia (RBA) board meeting.
"Only three months ago the RBA board considered further policy tightening after a strong inflation print and tomorrow the Board may discuss returning monetary policy to a more neutral stance after a soft inflation print," she said.
"We believe, on balance, the prudent path is to leave the cash rate at 4.75 per cent for now.
"On Friday, the RBA is expected to publish a lower underlying inflation profile than three months ago," Ms Beacher added.
"However, inflation is still likely to drift towards the top of the RBA's two to three per cent target band, implying that slightly restrictive monetary policy should remain in place until the inflation outlook is more benign."
Eleven of the 17 economists surveyed by AAP said they expected a cash rate cut from 4.75 per cent to 4.5 per cent when the RBA meets on Melbourne Cup Day.
