Westpac’s chief economist has warned the official cash rate will fall to half a per cent by early next year and the next interest rate cut will be sooner than predicted.

The Reserve Bank of Australia has lowered the official cash rate to a historic low of 1.00 per cent.

While economists are predicting more rate cuts to come, Westpac is confident the next cut will come as soon as October and even reach 0.5 per cent by February of next year.

Westpac Chief Economist Bill Evans tells John Stanley he initially predicted the next rate cut would come in November.

“I think that by October it will be pretty clear to them that their desire to have the unemployment rate fall to four and a half per cent is going to be well and truly unachievable, and they’ll see the need to cut by October.”

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