Australians got a fresh read on the cost of living yesterday, with the Australian Bureau of Statistics (ABS) releasing its June quarter inflation figures. The data lands just under two weeks before the Reserve Bank of Australia’s (RBA) Monetary Policy Board meets on 10–11 August to decide whether the cash rate moves again – and it gives households a clearer picture of where price pressures, and their own budgets, are heading.

What the latest inflation data showed

Headline inflation eased to 3.8 per cent in the 12 months to June 2026, down from 4.0 per cent in May, according to the ABS. On a monthly basis, the CPI actually fell 0.1 per cent, marking its second straight monthly decline.

The RBA’s preferred measure of underlying inflation, the trimmed mean, held steady at 3.6 per cent through the year – still well above the central bank’s 2–3 per cent target band.

Looking at where prices actually rose, housing remained the standout, up 6.8 per cent over the year, followed by food and non-alcoholic beverages (3.3 per cent) and recreation and culture (3.3 per cent). Softer fuel prices helped keep the headline number in check, but the categories that matter most for everyday household budgets – keeping a roof over your head and food on the table – continue to run hot.

Where does this leave the cash rate?

The cash rate currently sits at 4.35 per cent, after a run of increases earlier in 2026 as the RBA worked to bring inflation back under control. With this latest print showing some easing, economists are divided on what comes next.

Some bank economists see the softer result as room for the RBA to eventually ease policy, while others caution that inflation is still cooling too slowly to rule out another rate rise. Most market pricing currently points to the RBA holding the cash rate steady at its August meeting, but a further move in either direction hasn’t been taken off the table.

What it means for household expenses

For Australians with a mortgage, the elevated cash rate is still being felt directly. The average variable rate for new owner-occupier loans is sitting around the mid-6 per cent mark, well above where rates sat only a few years ago, which means many households are managing meaningfully larger repayments than they budgeted for.

Renters aren’t getting much relief either. Housing costs, including rents, are being driven more by the tight balance of supply and demand in the rental market than by the cash rate itself, so easing inflation data doesn’t translate into cheaper rent overnight.

More broadly, with food, insurance and other everyday costs continuing to climb, many households are still working harder to make the same income stretch across their essential bills – even as the headline inflation number heads in the right direction.

Managing your budget while rates stay higher for longer

Whatever the RBA decides in August, one thing seems clear: relief for household budgets is likely to be gradual rather than immediate. If you’re finding it harder to keep on top of credit card repayments, personal loans or everyday bills, there are steps that can help:

Review your budget

Revisit your monthly income and expenses to identify where costs have crept up, particularly around housing, insurance and groceries.

Consider consolidating debts

If you’re juggling multiple credit cards or loans, consolidating them into a single repayment can make managing higher rates easier and may reduce the total interest you’re paying.

Talk to your lender or creditors early

If repayments are becoming difficult, reaching out before you miss a payment gives you more options, including hardship arrangements or revised payment terms.

Get professional advice

A debt solution tailored to your situation can help you regain control, rather than letting rising costs snowball into missed payments and mounting debt.

Feeling the Pressure of Rising Costs?

If higher interest rates and cost-of-living pressures are making it harder to keep up with repayments, contact us today. Our team can walk you through your options and help you find a path back to financial stability.