The new inflation figures published on Wednesday may be decisive for the Reserve Bank as it weighs a February interest rate cut. The outcome for the December quarter is the last substantial economic update before the rate meeting on February 18,

Annual inflation ticked up for a third straight month in December as food, energy costs rose, CPI report showed. But underlying price measure eased.

A larger than expected drop in inflation data has boosted the chances of an interest rate cut as soon as February.

Australian consumer prices rose at the slowest pace in almost four years in the December quarter, while a pullback in housing costs helped cool core inflation and open the door to a cut in interest rates as early as next month.

The chance of a Reserve Bank rate cut in February has improved considerably after underlying inflation came in below expectations for the December quarter.