Australian mortgage holders can finally exhale after inflation unexpectedly cooled to 3.8% in the year to June, down from 4%, making the Reserve Bank less likely to hike rates on August 11. The Australian Bureau of Statistics' consumer price report, which some economists had dubbed a 'make-or-break' moment, showed underlying price pressures easing more than anticipated. The RBA's preferred trimmed mean measure rose just 0.8% in the June quarter, pushing the annual rate to 3.6% - below the RBA's last forecast of 3.8%. Independent economist Chris Richardson declared, 'bullet now officially dodged,' noting that rate hikes were starting to work and the Middle East war hadn't been as economically disastrous as feared. However, he cautioned that 'the fight against inflation hasn't been won yet.' Falling fuel prices, down 10.9% in June thanks to 'some stabilisation in the Middle East,' helped lower the headline rate - though that trend will reverse in July when the Iran war restarts. Homebuilding costs are still climbing at their fastest pace in three years (5.8%), as builders pass on higher material and labour costs. Stephen Smith of Deloitte Access Economics said households and businesses will breathe a 'collective sigh of relief,' but noted 'red flags' in the details, particularly service sector price pressures that suggest 'home-grown inflationary pressures are yet to be tamed.'