The Australian Bureau of Statistics has shared that the annual inflation dropped to 4.9% in July from 5.4% in June, a figure less than the economist forecasted rate of 5.2%, which signals that it will be likely that the RBA board leave the cash rate on at 4.1%.

Market pricing indicates that the odds are about 62% that the cash rate will stay at 4.1% for the rest of the year, as reported by the Financial Review.

Perhaps the RBA has done enough to conquer inflation for now, but families are already decreasing spending after the soaring cost of mortgage repayments.

According to the August RBA meeting minutes, the board agreed that there was a “credible path” back to the RBA’s 2 to 3% inflation aim short of additional raises in the cash rate.

The new RBA governor Michele Bullock asserted that another rate rise was feasible, however, the board was assessing their path each month and she did not say if one would be happing anytime soon.

Instead of raising rates, EY senior economist Paula Gadsby said that additional increases appeared to be increasingly needless.

“This cooling [in inflation] is further evidence that rate hikes are working, and the Reserve Bank will be pleased with its piloting of the economy towards a soft landing,” she commented.

However, worldwide banks are finding that inflation is moving away from goods and headed to the labour-intensive services sector as businesses pass on the cost of their expanding salary bills.

Overall, the RBA has made a significant contribution to slowing inflation but has yet to progress with the unemployment rate which stands at 3.7% and labour force participation a little less than record highs.

The quantity of job opportunities available, a major marker for unemployment, has dropped last year leading economists to forecast the jobless rate might increase within the next year as the economy slackens.