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Borrowers have been granted another month of interest rate relief, with the Reserve Bank leaving the official cash rate untouched at 4.1 per cent.

The second consecutive month on hold follows four percentage points of increases that have heaped pressure on borrowers.

Like many other central banks around the world, the RBA has been trying to unseat high inflation with a series of interest rate hikes.

Consumer prices are still growing but more slowly, with inflation pulling back to six per cent annual growth through to June, from seven per cent in March.

Despite passing its peak, inflation remains well above the RBA's two-to-three per cent target range.

RBA governor Philip Lowe said the most recent set of data was consistent with inflation returning to this band "with output and employment continuing to grow".

However, further tightening remains on the cards.

"Some further tightening of monetary policy may be required to ensure that inflation returns to target in a reasonable time frame, but that will depend upon the data and the evolving assessment of risks," Dr Lowe said in a statement on Tuesday.

For mortgage holders, the interest rate rises have been pushing up their monthly repayments.

RateCity analysis has the average borrower with a $500,000 mortgage stumping up well over $1100 extra towards their loan, compared with what they were paying before interest rates started going up.

Treasurer Jim Chalmers said the decision offered a welcome reprieve for Australian families.

"Australians are still under the pump, even as inflation moderates and even after this decision today," Dr Chalmers said.

The past few interest rate decisions have been close as the RBA inches towards the end of its tightening cycle, with economists once again divided ahead of the August call.

The convincing slowdown in inflation and subdued retail numbers bolstered the case for another pause, whereas strength in the jobs market and sticky services price pressures were frequently cited by those tipping a hike.

Oxford Economics Australia head of macroeconomic forecasting Sean Langcake said it was increasingly likely the RBA had reached the top of its rate hiking cycle.

"With economic momentum waning, it seems unlikely the RBA will be presented with more compelling arguments to raise rates than they would have heard at today's meeting," he said.

The economist picked up a slight change in the governor's language around inflation returning to the target range by "late" rather than "mid" 2025.

"This may have provided a justification for a tightening in policy to provide further insurance against rising inflation expectations," Mr Langcake said.

"But ultimately, the RBA seem comfortable letting inflation run above their target for a little longer."

© AAP 2023

Battered consumers have recovered a smidge of confidence that the Reserve Bank is coming to the end of its interest rate hiking cycle.

Confidence levels lifted 3.2 points but failed to crack the 80 mark, which is well below long-run averages, and have been stuck there for several months.

The ANZ and Roy Morgan weekly measure was buoyed by a sharp 5.7-point lift in "future financial conditions" as the latest batch of economic data bolstered the case for an extended interest rate pause.

The Reserve Bank of Australia board is due to meet on Tuesday for its August rates call.

Central banks around the world have been lifting interest rates to combat high inflation, but are coming to the end of their hiking cycles.

The RBA board paused interest rates at 4.1 per cent in July, but it is likely to be a close call between another 25 basis point hike and a second month on hold for August.

The futures market was confident the central bank would hold fire, pricing in less than a 10 per cent chance of a rate rise.

But economists were conflicted, with a Reuters poll revealing a slender majority in favour of a rise.

Treasurer Jim Chalmers said borrowers coming off low fixed rates to more expensive options were particularly vulnerable, although the peak of these expiring loans had already passed.

"About 19 per cent of people with a fixed loan came off in the June quarter,'' he told ABC Radio.

"We expect about 17 per cent to come off in the September quarter, which is fewer than in June but still a substantial number."

While Dr Chalmers was unable to comment on the RBA's upcoming decision, he said the central bank would likely take moderating inflation into account.

The consumer price index grew by six per cent annually in the June quarter, down from seven per cent through to March.

The all-important quarterly consumer price index came in below the RBA's own predictions, but prices are still rising much faster than the two-to-three per cent target.

The official index also revealed a few lingering sources of inflation to worry about, including rents.

Retail sales also moderated by more than expected in June, suggesting consumers are already tightening their belts and that higher interest rates are already working to cool demand.

However, business conditions proved resilient, as did the jobs market, suggesting there is still a fair bit of heat in the economy.

The housing market has also started to rebound strongly, which could make people feel wealthy and prompt them to spend more.

CoreLogic's national home value index rose 0.7 per cent in July, lifting for the fifth month in a row, but the pace of growth has started to slow.

A slowdown in the manufacturing sector has also started to stabilise, with the July purchasing managers index still in contractionary territory but improving.

Judo Bank chief economic adviser Warren Hogan said the results suggested the worst of the pullback in manufacturing activity was over and there were no signs of a looming recession in the data.

"Further evidence of a soft landing for manufacturing, combined with another solid employment index, suggests that Australia's economy remains resilient and will continue to perform well over the second half of 2023," Mr Hogan said.

© AAP 2023

Beer drinkers are being warned to brace for more expensive pints as the industry is hit with another tax increase.

Alcohol prices are not exempt from rising costs of living and the tax is adjusted twice a year in line with inflation.

The latest increase represents a 2.2 per cent rise in just six months and since May 2022 the beer tax has gone up by more than 10 per cent.

It means Aussies partial to a full-strength pint will pay nearly $1 extra in tax while publicans will face an additional $80 tax for a keg.

Australia has also overtaken Japan to have the third highest beer tax in the world, behind notoriously expensive Norway and Finland.

Brewers Association John Preston said Australia's tax hikes had become out of control.

"We don't believe these increases are now actually raising any more money for the government, they are just hurting beer drinkers and our pubs and clubs," he said.

"While the treasurer inherited these automatic half-yearly beer tax increases, we're calling on the government to step in and take some action before a trip to the pub or a dinner out with the family becomes an unaffordable luxury for most Australians."

It's a similar story for spirits lovers with the tax tipping over the $100 per litre mark for the first time.

Distillers and spirits manufacturers are calling for a freeze on alcohol excise rises as the price peaks at a milestone it had not been expected to hit before 2029.

© AAP 2023