Inflation was unchanged in January helped in part by lower petrol as well as fruit and vegetable prices, a survey showed.
Consumer prices rose 3.1 per cent during the year to January, the TD Securities-Melbourne Institute inflation gauge showed.
The monthly inflation gauge was unchanged in January, following a 0.3 per cent increase in December.
The survey indicates the Reserve Bank of Australia (RBA) may decide to keep interest rates steady when it meets this week. The RBA sets rates to keep inflation between 2 and 3 per cent.
Most economists were surprised when the Australian Bureau of Statistics (ABS) reported that the consumer price index (CPI) fell by 0.1 per cent in the December quarter after petrol prices fell 12.4 per cent.
"Headline inflation continues to decelerate under the well known and well documented price declines in oil and bananas," TD Securities chief strategist Stephen Koukoulas said.
"The deceleration in headline inflation will give the RBA some breathing space when it comes to the next interest rate rise."
