RBA Expected to Keep Interest Rates Steady Amid Falling Inflation

The Reserve Bank of Australia (RBA) is expected to keep interest rates on hold at its upcoming meeting, bringing relief to mortgage holders. The decision comes after a surprise fall in inflation, which fell from 4% to 3.8% in June, the lowest level since the start of the Iran war.

Senior economist Taylor Nugent at NAB said the RBA would likely follow market forecasts and keep rates steady at 4.35%. 'The RBA would need a push to deliver further tightening and the net of data flow since May has not given them that push,' he said.

Nugent also noted that unemployment is above the RBA's forecast, and underlying inflation is marginally lower than feared. However, he cautioned that inflation risks remain elevated.