Australia's consumer prices slowed down in May that may prompt the Reserve Bank of Australia to keep benchmark interest rates steady at tomorrow's meeting.

According to an index compiled by TD Securities and the Melbourne Institute released on Monday, consumer prices advanced 3.3 percent in the 12 months through May, but lower compared to a 3.6 percent gain recorded in April.

Analysts said cheaper durable goods consisting of household appliance as well as holiday spring travel tickets outweighed the gains recorded for fruit and vegetable prices in the market.

Reserve Bank of Australia governor Glenn Stevens is seen keeping benchmark interest rates unchanged at 4.75 percent for a sixth meeting tomorrow. This would be the longest pause since 2007 as the Australian economy continues to be in dire straits and contracted in the first quarter by the most in 20 years as floods and storms slashed coal exports.

"We expect the bank to signal that it can comfortably remain on the sidelines for several months," said Annette Beacher, head of Asia-Pacific research at TD Securities in a statement. "We did not subscribe to the 'June is live' rhetoric that emerged early in May, as many members of the RBA board remain clearly concerned about the two-speed economy."

According to the report, the biggest contributors to the overall change in May were higher prices for fruit and vegetables, and rents and books. These were offset by falls in vacation travel and accommodation, alcohol and tobacco, and household appliances.

In the month, the price of fruit and vegetables rose by 3 percent, rents increased by 1.5 percent and fuel advanced by 0.5 percent, TD said.

"Our inflation gauge continues to rise at an annual growth rate of above 3 per cent, and has done so since September last year," Ms Beacher said in a related Bloomberg report. The RBA aims to keep inflation in a range of 2 percent to 3 percent on average.

The Melbourne Institute is a research unit of Melbourne University, and TD Securities is a division of Toronto-Dominion Bank, one of Canada's largest lenders. The monthly inflation index measures the prices of more than 1000 goods and services.