Consumer prices in Uganda rose 0.3 percent in October from the previous month but the year-on-year rate of inflation eased to 4.5 percent from a revised 5.5 percent a month earlier, pointing to room for a small rate cut.

Helped by slowing food rises, the rate of inflation in east Africa's third-largest economy has fallen consistently to its lowest level since January, 2011, after surging to an 18-year high in October last year.

"During the month ... there was (a) decrease in the prices of sweet potatoes, sweet bananas, oranges, maize flour, some fresh vegetables and fresh milk in most centers," the Ugandan Bureau of Statistics (UBOS) statistics office said on Wednesday.

Uganda's central bank or Bank of Uganda has cut its key lending rate in each of the last five months, to leave the benchmark rate at 13 percent.

Central Bank Governor Emmanuel Tumusiime-Mutebile said this month that any further cuts to the key lending rate in 2012 were likely to be small unless there was a major drop in inflation and aggregate demand.

Food price inflation fell 2.5 percent year-on-year compared with a 2.8 percent increase in September, UBOS said.

The core rate of inflation, which excludes food crops, fuel, electricity and metered water, dropped to 4.0 percent from a revised 4.9 percent in September, the statistics office said. Reuters