Homebuyers could be hit with an interest rate rise in the months ahead, despite a survey showing inflation pressures eased in October. The TD Securities-Melbourne Institute experimental monthly inflation gauge showed prices of consumer goods and services fell by 0.1 per cent in October, to be 3.3 per cent higher than a year earlier. As measured by the gauge, the annual headline inflation rate has remained above the top of the Reserve Bank of Australia's (RBA) two to three per cent target band for the past four months. In September, prices of consumer goods and services rose by 0.6 per cent. Contributing most to the overall decrease in the gauge's headline inflation measure in October were falls in the cost of automotive fuel and fruit and vegetables, while increases in house purchase, alcoholic and non-alcoholic drinks partially offset the declines. "Inflation pressures continued to simmer in October, even though the sharp fall in petrol and fruit and vegetable prices saw the overall price level fall," TD Securities chief strategist Stephen Koukoulas said. "The underlying inflation measures show further broadly based price increases which will no doubt leave the RBA anxious about the need for a further interest rate rise in the months ahead." Excluding volatile items - automotive fuel and fruit and vegetables - the core inflation measure rose by 0.3 per cent in October to be 2.9 per cent higher than a year earlier. Mr Koukoulas said monthly inflation data around the world had been hugely volatile in recent times as swings in petrol prices impacted at the consumer price level. In almost all instances, markets had been focussing on core inflation readings to judge the implications for interest rates, he said. "The information on core inflation from the TD-MI data suggests that an interest rate rise is more likely than not in the months ahead as inflation pressures build," he said. Official inflation numbers from the Australian Bureau of Statistics last week showed the nation's consumer price index (CPI) rose 0.9 per cent in the September quarter, lifting the annual rate to three per cent, at the top of the RBA's target band. By AAP