The rate of inflation slowed to a crawl in August, leaving the door open for the central bank to stimulate the economy if need be.

The TD Securities/Melbourne Institute Monthly Inflation Gauge was 0.1 per cent in August, following a 0.5 per cent rise in July and a flat result in June.

The rate for the 12 months to August was 2.1 per cent, down from 2.7 per cent in July.

TD Securities head of Asia-Pacific research Annette Beacher said the data shows that inflation is at the low end of the Reserve Bank of Australia's two to three per cent target range.

"The clear signal from this August report is that inflation remains benign," she said.

While the low inflation gives the RBA scope to cut the cash rate further, Ms Beacher said she doesn't expect the central bank to change it at the board meeting on Tuesday.

The RBA last reduced the rate, by a quarter of a percentage point to a new record low of 2.5 per cent, at its meeting on August 5. Before that it cut it in May, by the same amount.

"At the RBA board meeting tomorrow, we expect a lively debate about the recent softening in activity data," Ms Beacher said.

"Otherwise, the case for wait and see after the August interest rate cut is compelling."

The TD inflation gauge showed there were falls in the price of clothing, holiday travel and accommodation, and private motoring.

They were partly offset by price rises for vegetables, newspapers, books and stationary, and accommodation.

TD's estimate of the trimmed mean measure of underlying inflation, which filters out extra-large rises and falls, recorded an annual fall of 0.1 per cent in August after a 0.6 per cent increase in July.