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NEWSFLASH - Inflation finally falls, now for the RBA

The pain that many home loan customers are feeling stems from the Reserve Bank's efforts to rein in inflation by increasing the cash rate.

Today May's inflation read is out. The ABS has announced that inflation has fallen to 5.6% in the 12 months to May 2023. In the 12 months to April, inflation was sitting at 6.8%. At 5.6% this is a lower figure than what was anticipated pre announcement and can be seen as a small win in the high inflation/high interest rate world in which Australians find themselves.

The 5.6% inflation figure for May is the smallest increase in inflation since April last year.

This raises the question as to whether the Reserve Bank will move again with the cash rate at next Tuesday's monthly meeting. Prior to the inflation read, it could be argued that the consensus was 50/50 as to whether the RBA will raise the cash rate again at the coming meeting.

The fact that inflation has fallen is a more positive lead into the July RBA meeting next week. Will we see a pause on Tuesday. I'll keep you posted.


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