RBA Faces Tough Decision as Inflation Pressures Ease

Recent inflation figures from Australia suggest that inflation pressures may be easing, which could bring some hope for mortgage holders. The Consumer Price Index (CPI) rose 3.8 percent in the year to June, down from 4.0 percent in the year to May.

The Reserve Bank of Australia's (RBA) preferred measure of underlying inflation, the trimmed mean, was steady at 3.6 percent. This is a significant piece of data for the RBA as they prepare for their next interest rates meeting on August 10-11.

Financial markets have cut the chances of a rate rise next month to close to zero after the softer-than-expected inflation report. However, there is still a meaningful chance of one more rate rise later in the year if inflation risks rise.