Fruit and vegies prices fall in March Fruit and vegie prices fell in March, but the savings were eaten up by increases in the cost of fuel, alcohol and tobacco. The TD Securities Melbourne Institute Monthly Inflation Gauge increased by 0.2 per cent in March for a 2.1 per cent annual pace, which followed a flat monthly result in February. It was the lowest annual inflation outcome for eight months, renewing expectations of another official interest rate cut by June. Consumer prices rose slightly in the month as increases in the cost of alcohol, tobacco, clothing and footwear were offset by falls in fruit and vegetables, household appliances and audio, visual and computing equipment. Fruit and vegetable prices fell by 1.4 per cent in March while the price of automotive fuel rose by 0.5 per cent. TD Securities Head of Asia-Pacific Research Annette Beacher expects forecasts for the March quarter consumer price index to increase by 0.5 per cent in the quarter to be 2.6 per cent higher than a year ago. She said the Reserve Bank of Australia would leave the cash rate on hold at three per cent until June amid benign inflationary pressures. "Recent events in Europe are a reminder that offshore risks remain, even if the risks of outright financial market contagion are minimal," Ms Beacher said. TD predicts a final 25 basis point rate cut to 2.75 per cent by June if a soft inflation report is delivered. Ms Beacher said the inflation rate was expected to fall slightly by the end of the year.