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.

Underlying inflation dropped to its lowest rate in three years in the December quarter, strengthening the case for a pre-election rate cut next month.

Australia's annual inflation rate eased to 2.4% in the fourth quarter, down from 2.8% in the previous period and below expectations of 2.5%. Core inflation, the RBA’s preferred inflation gauge, fell to a three-year low of 3.