Inflation is expected to remain benign to the end of the year, despite the falling Australian dollar, leaving the door open for a further rate cut.
The TD Securities/Melbourne Institute Monthly Inflation Gauge rose 0.1 per cent in October, following a 0.2 per cent rise in September and a 0.1 per cent increase in August.
The inflation gauge increased by 2.1 per cent in the 12 months to October, figures released on Monday show.
Price rises for new homes, non-alcoholic drinks, meat and seafood were offset by falls in the price of fruit, vegetables, petrol and furniture.
The consumer price index (CPI), the key measure of inflation released by the Australian Bureau of Statistics, rose 1.2 per cent in the September quarter - stronger than the 0.8 per cent rise economists were forecasting.
Economists said the higher-than-expected figure ended any hope of another cash rate cut in 2013.
But the inflation gauge shows inflation remains benign, TD Securities head of Asia-Pacific research Annette Beacher said.
"Compared with the surprise jump in headline inflation in the September quarter, this October report is rather benign, and starts the final quarter of the year with a whisper," Ms Beacher said.
"Headline inflation and our trimmed mean measure of inflation were both only 2.1 per cent higher than a year ago, suggesting no sign of a pickup in inflation in the final months of 2013.
"While early days yet, this report is likely to provide some relief for the Reserve Bank as tradable inflation was flat in the month after three consecutive increases."
Ms Beacher said the Reserve Bank of Australia (RBA) was likely to leave the cash rate on hold at 2.5 per cent when it meets on Tuesday.
"After two neutral-bias communiques, we expect a near repeat tomorrow," she said."It will be interesting to see if the board agrees with the RBA governor's recent proclamation that `at some point in the future the Australian dollar will be materially lower than it is today' as that message managed to dent the dollar to a considerable extent last week and keep rate cut hopes alive."