Inflation Drop May Stall RBA Rate Hikes in August

The Reserve Bank of Australia (RBA) may hold off on raising interest rates in August, thanks to a surprise drop in inflation. The Australian Bureau of Statistics reported that the consumer price index eased slightly to 3.8%, down from 4% in May.

This is good news for mortgage holders, who have been facing increasing costs. The RBA's preferred measure of inflation, trimmed mean inflation, remained steady at 3.6% in June.

LJ Hooker group head of research Mathew Tiller said the figures provided 'a little bit of breathing room' for the RBA to consider holding off on rate hikes. However, he noted that both headline and underlying inflation remain above the RBA's target range of 2-3%.