Falling inflation rate boosts chances of RBA interest rate cut and relief for mortgage holders

While further rate cuts on the back of the May inflation figures will be welcomed by mortgage holders, any further reduction in borrowing rates is expected to fuel another surge in property prices. Photograph: Lisa Maree Williams/Getty Images

Australia’s inflation rate has eased again, bolstering expectations the Reserve Bank will lower the cash rate next month and bring further reprieve for mortgage holders.

The headline inflation rate was 2.1% in the 12 months to May, down sharply on the previous month’s figure of 2.4%, according to consumer price index figures released on Wednesday.