Consumers in Australia expect a slight decline in inflation, according to survey results issued today by the Melbourne Institute.

The Institute's consumer inflation expectations index slumped for the fourth consecutive month to 2.8 percent in August from 3.3 percent in July.

The proportion of consumers expecting inflation to be within the central bank's 2 to 3 percent target band slumped from 19.1 percent in July to 18.9 percent in August. This was above the 12-month average of 17.9 per cent.

The Reserve Bank uses monetary policy, or interest rates, to keep inflation within its target range over the economic cycle.

It maintained the overnight cash rate at 4.5 per cent on August 3 as expected by market economists after consumer price index in the June quarter showed lower than the expected annual pace of 3.1 per cent.

There were less people expecting inflation to rise, said Melbourne Institute research fellow Michael Chua.

The proportion of respondents expecting an increase was at 73.5 in August, compared to 78.9 per cent in July.

According to Dr Chua, this month's inflationary expectations number was clearly a reflection of a weaker than expected June (quarter) CPI.

The number of respondents predicting inflation to remain the same climbed to 16.6 per cent in August, from 11.4 per cent the prior month.

The survey of 1200 respondents was conducted August 2 through August 8.