Borrowers will be hoping for interest rate relief before a neck-and-neck call between another cash rate boost or staying on hold.

The Reserve Bank board, due to meet on Tuesday afternoon for the July decision, is nearing the end of its hiking cycle after lifting interest rates 12 times since May last year.

Number 13, if delivered, will take the official cash rate to 4.35 per cent.

The central bank has responded to high inflation with the only tool at its disposal, interest rates, to slow the economy and weigh down consumer prices.

The increases have been hard-felt by mortgage holders, especially those who borrowed to capacity during the most recent pandemic-fuelled housing boom.

Higher interest rates push up mortgage repayments on variable-rate loans, with another 25 basis point hike to add $1211 to monthly payments on a standard $500,000 loan compared to before the hikes, according to RateCity.

Both markets and economists are unclear on the trajectory for interest rates, with 27 economists surveyed by Bloomberg divided on the July decision – 14 expected a pause and 13 tipped a hike.

A major slackening in the rate of headline inflation is playing into the case for a pause, with the monthly consumer price index falling from 6.8 per cent to 5.6 per cent in May.

But under the hood, the outlook for inflation was less optimistic, with the weakening much less pronounced when big falls in fuel and travel were plucked out.

The RBA has also ingested fairly robust spending data since the last meeting, although a rush to snap up discounted goods in part explained the jump in that number, as well as signs of strength in the labour market.

On the other hand, business surveys have pointed to sinking confidence and worsening conditions, which point to a cooling economy and interest rates starting to bite.

– AAP