Households plan to save 80 per cent of their stage three tax cuts due to start hitting bank accounts from July 1, which augurs well for the Reserve Bank of Australia’s inflation outlook and hopes of interest rate relief.

But the Reserve Bank board has “limited tolerance” for inflation remaining above the mid-point of its 2 per cent to 3 per cent target band beyond 2026, according to the minutes of its May 7 board meeting.