Westpac Banking Corporation (ASX:WBC) chief economist Bill Evans has reportedly predicted the Reserve Bank of Australia (RBA) will cut rates to a record low this year.
Fairfax Media says Mr Evans expects the RBA to cut rates by 0.25 percentage points at each of its next three meetings, next week in July and in August, in addition to another rate cut before the end of the year.
The prediction would see Australia’s official cash rate drop to as low as 2.75 per cent, down from a rate of 3 per cent following the global financial crisis.
Mr Evans reportedly believes monetary policy is currently too tight given the shock to confidence and fragility of the economy, weakness in the retail sector, a falling house prices and softer capital spending.
Westpac’s first half net profit dropped 25 per cent to $3 billion on the back of a rise in bad debts.
