Inflation figures out on Wednesday are expected to be among the lowest in three years, after the price of oil more than halved in the past six months.

The consumer price index (CPI), the key measure of inflation, is forecast to have risen 0.2 per cent in the December quarter, for an annual rate of 1.8 per cent, an AAP survey of 15 economists has found.

That would also be the third lowest reading in three years and the first time inflation has been below the Reserve Bank’s target range between two and three per cent since mid-2012.

Oil prices have recently plummeted to five year lows, mainly because of increased supply, and that has pushed petrol prices under $1 a litre in some areas, from around $1.30 in early December.

HSBC chief economist, Paul Bloxham doesn’t expect the RBA to cut the cash rate in response to a weak inflation result, mainly because it is likely to be almost entirely dragged down by petrol prices.

“Headline CPI inflation is expected to be low; however, as always, the RBA is expected to focus on the underlying measures to gauge the pulse of inflation,” he said.

Economists expect underlying inflation to be around 0.5 per cent in the December quarter, and 2.2 per cent in the year to December.

AAP