Increases in the prices of water, electricity and property rates pushed up the quarterly rate of inflation to 0.6%. Annually it's at 3.5%
But the underlying rate, which the RBA looks at because it strips out one off price moves that may skew the headline rate, remained within its 2 to 3 per cent target band.
Shane Oliver from AMP Capital says given the uncertain economic times, that means interest rates will fall next week.
He's also predicting a further two cuts next year, but that the Australian dollar will remain strong.
On the downside, he says a full solution to the European debt crisis may still be some time away.
