Australia's consumer prices fell slightly in August as a result of the drop in the price of fruits and vegetables, according to the TD securities-Melbourne Institute Inflation Gauge released on Monday.
The TD Securities-Melbourne Institute Inflation Gauge, a monthly survey by the investment dealer of TD Securities and the Melbourne Institute of Applied Economic and Social Research, fell 0.1 percent in August, following a 0.3 percent increase in July.
In the 12 months to August, the Inflation Gauge rose 2.9 percent, compared to a 3.2 percent rise in the year to July.
The August result was at the upper end of the central bank's target band for inflation of two to three percent over the course of the economic cycle.
Price rises for private motoring, furniture and furnishings, and household services in August were more than offset by falls in fruit and vegetables, holiday travel and accommodation, and auto, visual and computing equipment, TD securities said.
The price of fruits and vegetables fell by 1.6 percent in August, following a 1.8 percent rise in July.
TD Securities head of Asia-Pacific research Annette Beacher said inflation seemed to be easing.
"The signal from our Inflation Gauge so far is that the acceleration in prices evident in the first half of this year may have taken a breather in the September quarter," Beacher said in a statement on Monday.
"Looking ahead, we have confirmation that an outsized resource- led private investment boom remains on track, and productivity remains extremely weak, hence inflation pressures remain firmly tilted to the upside for 2012."
Beacher said she did not expect the Reserve Bank of Australia (RBA) to raise the cash rate for the remainder of 2011.
The RBA board is due to hand down its monthly interest rate decision on Tuesday.