The latest consumer price index figures, released by the Australian Bureau of Statistics on Wednesday, showed annual inflation eased to 4.9 per cent in October, after prices grew by 5.6 per cent in the year September.

With the result undershooting economists’ expectations of a 5.2 per cent increase, the likelihood of a pre-Christmas rates pause is almost certain.

Speaking at a central banking conference in Hong Kong on Tuesday, RBA governor Michele Bullock said the central bank would need to be “a little bit careful” with any further monetary tightening.

“We want to make sure that we keep inflation under control, and we bring it back down to our band, but we also need to make sure we do that in the context of not imposing on the economy too much and raising the unemployment rate so much,” Ms Bullock said.

While markets were pricing just an 11 per cent chance of a rate hike on December 5 ahead of the data release, there is a 68 per cent chance of a hike to 4.6 per cent by June 2024.

The surge in the Aussie dollar, which touched US67c briefly in offshore trading on Tuesday, has also assisted the RBA’s inflation fighting efforts.

But analysts warned the ABS monthly CPI indicator did not provide a full picture of the price pressures across the economy.

Due to an overrepresentation of the prices of goods, the indicator did not fully account for still-high services inflation, so it would be of little use in gauging the domestic sources of inflation the RBA is now focused on.

The easing of goods price inflation, which has fallen as supply chain bottlenecks eased and consumers cut back on discretionary items, was reflected in the 1.5 per cent decrease in clothing and footwear prices in the year to October.

A drop in fuel prices, which fell to 8.6 per in October, subtracted 0.3 percentage points from headline CPI, as the reinstatement of the full fuel excise in September 2022 was no longer recorded in the annual figures.

Electricity prices also eased to 10.1 per cent, well below their peak of the 18 per cent increase in the year to September, with government rebates taking the sting out of higher power bills.

Despite the progress, services inflation, which the RBA has warned is much “stickier”, remained stubborn, as cost pressures, including higher wages, were passed through to consumers.

Prices for insurance rose by 8.6 per cent in the 12 months to October, while rents jumped 6.6 per cent over the same period, as a surge in migration and dwindling housing stock pushed costs higher.