RBA Gets Breathing Room as Inflation Eases Slightly

The Australian Bureau of Statistics has reported a slight drop in consumer price index (CPI) inflation, easing to 3.8% in June from May's 3.9%. This decrease is a welcome relief for homeowners, particularly those with mortgages.

Mathew Tiller, group head of research at LJ Hooker, believes this news provides the Reserve Bank of Australia (RBA) with some breathing room when deciding on the cash rate in August. The RBA's target range is between 2 and 3%, and while inflation remains above this range, the slight drop may influence their decision.

Underlying inflation, which measures changes to prices excluding volatile markets like oil, held steady at 3.6% in June. Housing continues to be a major contributor to inflation, with costs increasing by 6.8% over the past year.