The official cash rate could drop as low as 3.75 per cent by early next year, according to forecasts by NAB.
NAB said yesterday its October Business Survey and Economic Outlook had revealed record low business confidence and a sharp deterioration in business conditions.
With downside risks to growth strong, NAB adjusted its forecast for the official cash rate to 3.75 per cent for early 2009 – previously 4.5 per cent for mid-2009.
“We expect another 75 point rate cut in December and then another 75 basis points in early 2009,” NAB said.
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