Borrowers may soon find out if interest rates could go lower, when the all-important Consumer Price Index (CPI) is released.
An AAP survey of 12 economists reveals a median forecast for June's CPI, to be released on Wednesday, to show an average increase of 0.5 per cent in prices over the June quarter and 2.5 per cent for the year to the June quarter.
Underlying inflation, which excludes the most volatile price movements and is the Reserve Bank of Australia's preferred measure, is also expected to be at 0.5 per cent for the quarter and 2.3 per cent for the year.
Inflation is an important factor in the RBA's decision-making when it comes to the cash rate.
In the minutes of its July meeting, the RBA said the inflation outlook "could still provide some scope for further easing, should that be required to support demand".
CommSec economist Savanth Sebastian said the key upside risk to inflation would be the unwinding of discounting, although low wage expectations would ensure inflation remained low.
"In the March quarter, we had some of the biggest discounting we've seen in the retail sector for 13 years," Mr Sebastian said.
"But, given a modest improvement in activity, a pick-up in confidence and the fall in currency, we've probably seen some of that discounting being unwound, potentially adding some upside risks to the inflation forecast.
"If inflation came in at 0.7 or 0.8 per cent, that would certainly concern the RBA because they know the falling Australian dollar is doing enough."
Mr Sebastian said the RBA was still expected to cut the cash rate again in August.
"There's no better time than straight after the inflation result to give them a reason to be cutting," he said.
"But, I think after that, the lower currency is doing enough to rebalance the economy away from mining and to other sectors like exports, so they will probably stay on hold after that."
AMP Capital Investors senior economist Bob Cunneen said inflation was expected to remain contained to the midpoint of the RBA's two to three per cent target range in the June quarter.
"A softer labour market with marginal jobs growth and the unemployment rate gradually moving higher has seen subdued wage costs increases," Mr Cunneen said.
"The lower Australian Dollar since May is also yet to impact the cost of imports.
"For the RBA, this modest inflation outcome combined with an economy growing below its normal pace is likely to justify another 0.25 per cent interest rate cut to 2.5 per cent at the August meeting."
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