Australian consumer prices rose by less than expected last quarter while core inflation stayed stubbornly stuck at all-time lows, a subdued result that keeps alive some chance of yet another cut in interest rates.
Wednesday's data from the Australian Bureau of Statistics showed the consumer price index (CPI) rose 0.5 percent in the fourth quarter, from the previous quarter, missing forecasts of a 0.7 percent increase.
The annual pace did pick up to 1.5 percent, from 1.3 percent, but again undershot expectations. The biggest price rises in the quarter were for tobacco, petrol, domestic holiday travel and accommodation. Falls were seen for travelling abroad, accessories and waters, soft drinks and juices.
Key measures of underlying inflation that drive monetary policy also held around 1.5 percent, well short of the Reserve Bank of Australia's (RBA) target band of 2 to 3 percent.
"It keeps the prospect of another rate cut well and truly alive," said Shane Oliver chief economist at AMP Capital.
"We are thinking in May. These numbers highlight the downside risks to inflation in Australia and the risk that it will take longer to get back to target."