After the June data was released, he told Yahoo Finance the probability of an August rate increase had gone down but stressed a "hike cannot be ruled out".

If the RBA did hike interest rates again, Canstar calculated a 0.25 per cent hike would cost a borrower around $100 extra per month on a $600,000 loan.

"The underlying Q2 CPI data suggests that inflation in Australia has stopped falling and is now stuck close to 4 per cent, and that the RBA's concerns about sticky domestic services inflation still remain," he said.

Economists have been crunching the numbers and revealing their predictions for where the central bank will land following the August meeting.

HOLD: AMP chief economist Shane Oliver said the inflation figures were “not as bad as feared” and said there was “no case for a rate hike”, particularly with quarterly retail sales down

HOLD: VanEck head of investments Russel Chesler agreed it was “highly unlikely” the RBA would increase rates next week but warned mortgage holders were “not out of the woods”.

“Unless inflation falls, the RBA may still need to hike rates this year, and we are a long way from a rate cut,” Chesler said.

“The RBA has previously stipulated a low tolerance for a slower-than-expected return to target, suggesting it is amenable to measures that stimulate more downward pressure on inflation if needed.”

HOLD: Moody's Analytics economist Harry Murphy Cruise expects the RBA will hold interest rates in its August meeting but thinks rate cuts won't be on the cards for "some time yet".

"We expect the RBA to keep rates at 4.35 per cent until February next year," he said.

HOLD: CreditorWatch economist Anneke Thompson said the data was unlikely to convince the RBA that another rate hike was warranted.

"While the RBA would certainly like to see faster progress being made on the fight against inflation, another increase to the cash rate is unlikely to achieve this, given that households and businesses that would pull back on spending due to higher interest rates have already done this," she said.

When do the major banks think interest rates will drop?

Commonwealth Bank and Westpac's economic teams forecast the RBA to cut interest rates in November this year.

ANZ previously pushed its forecast back to February 2025, while NAB has pushed it to May 2025.

Treasurer Jim Chalmers said figures were broadly in line with the RBA’s forecast and showed underlying inflation was continuing to moderate.

“Inflation is still sticky and stubborn across our economy, and more persistent than we would like, but the June quarter is the sixth consecutive quarter of lower annual trimmed mean inflation in Australia,” he said.

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