Aussies with a mortgage have been dealt a brutal blow amid warnings the Reserve Bank will likely increase interest rates in light of recent inflation figures.

Australian Bureau of Statistics data showed on Wednesday the consumer price index fell four per cent in the 12 months to May - down from 4.2 per cent in April.

While headline inflation dipped, the trimmed mean, the measure preferred by the RBA, rose from 3.4 per cent in April to 3.6 per cent in May.

The target band sits between two and three per cent.   

KPMG chief economist Dr Brendan Wren told ABC this would likely put pressure on the RBA to raise interest rates in August.

'Unfortunately, I think it adds to the case for a rate hike,' he said.

'The number that's much more important, and that matters, is core inflation.

'And unfortunately, what we're seeing is core inflation rise. 

'That will put the Reserve Bank on notice to increase interest rates at the next meeting in August, which is pretty much what we had anticipated ourselves.'

The biggest contributor to annual inflation in the year to May was housing.

Food and non-alcoholic beverages and transport followed next.  

'Electricity costs are 21.1 per cent higher than 12 months ago as Commonwealth and State government rebates that reduced electricity costs for households are no longer in place,' ABS head of prices statistics said.

more to come