The stability and dynamics of an axisymmetric lifted flame are studied by means of direct numerical simulation (DNS) and linear stability analysis of the reacting low-Mach-number equations. For light fuels (such as non-premixed methane/air flames), the non-reacting premixing zone upstream of the lifted flame base contains a pocket of absolute instability supporting self-sustaining oscillations, causing flame flicker even in the absence of gravity. The liftoff heights of the unsteady flames are lower than their steady counterparts (obtained by the method of selective frequency damping (SFD)), owing to premixed flame propagation during a portion of each cycle. From local stability analysis, the lifted flame is found to have a significant stabilizing influence at and just upstream of the flame base, which can truncate the pocket of absolute instability. For sufficiently low liftoff heights, the truncated pocket of absolute instability can no longer support self-sustaining oscillations, and the flow is rendered globally stable.