[SYDNEY] A private-sector gauge of Australian inflation released on Monday showed a slight pick-up in price pressures in September, but not to the extent that would worry the central bank.

The TD Securities-Melbourne Institute's monthly measure of consumer prices rose 0.3 per cent in September from August, when it edged up 0.1 per cent.

The annual pace ticked up to 1.9 percent, from 1.7 per cent, reaching its highest since November 2014. However, it was still below the Reserve Bank of Australia's (RBA) target band of 2 to 3 per cent.

The benign inflation environment means the RBA has room to cut interest rates if needed, but all 25 analysts polled by Reuters last week expect the central bank to stand pat at Tuesday's policy meeting.

The RBA last cut the cash rate to a record low 2.0 per cent in May and has since appeared happy with the current policy setting. "We remain of the view that the RBA is comfortable with a terminal cash rate of 2 per cent," said Annette Beacher, chief Asia-Pacific macro strategist at TD Securities.

Monday's survey showed the trimmed mean measure of the CPI edged up 0.2 per cent in the month, taking the annual rate to 1.6 per cent.

Inflation excluding fuel, fruit and vegetables came in at 0.5 per cent, versus 0.2 per cent in the previous month. As a result, the annual pace quickened to 2.3 per cent, from 2.0 per cent.

Non-tradables inflation, covering the prices of goods and services not determined by international competition, sped up to 2.1 per cent, from 1.9 per cent. Tradables inflation was at 1.7 per cent, up from 1.4 per cent.

For September alone, there were price rises for tobacco, holiday travel and accommodation as well as fruit and vegetables.

These rises were offset by falls in petrol prices, newspapers, books and stationery and garments.

REUTERS