The Australian Bureau of Statistics consumer price index released on Wednesday moderated by more than expected to 4.1 per cent, down from 5.4 per cent at the last quarterly update in September.

Over the quarter, it weakened to 0.6 per cent from 1.2 per cent in the three month to September.

ABS head of prices statistics Michelle Marquardt said this was the smallest quarterly rise since the March 2021 quarter.

“While prices continued to rise for most goods and services, annual consumer price index inflation has fallen from a peak of 7.8 per cent in December 2022, to 4.1 per cent in December 2023,” she said.

A convincing slowdown was expected in December, with economists tipping a 4.3 per cent annual increase in the headline result and 0.8 per cent on a quarterly basis.

The figures will set the scene for the first cash rate meeting of 2024 on February 6, with the Reserve Bank likely to appreciate proof of a weakening inflationary pulse.

The central bank has been lifting aggressively hiking interest rates in a bid to bring inflation back within its two-three per cent target range, which has been felt acutely by mortgage holders in the form of higher monthly repayments.

-AAP