Westpac has done an about face in predicting the Reserve Bank will keep its official cash rate on hold at the release of its monetary policy statement on November 13.
The bank previously forecast a 25-basis-point cut, although it has said it would be close call.
Westpac now expects the cut - to 0.75 per cent - to occur next February.
"The Reserve Bank's forecasts and rhetoric had been 50/50 on whether a cut might be required at some stage, but we thought a rash of downside surprises would prompt the Reserve Bank to cut as soon as November," Westpac chief economist Dominick Stephens said in a commentary.
"That is not the way the dice have fallen. True, economic growth remains subdued and business confidence is very low. But on balance the outlook for inflation and employment has actually lifted a little since August, because the exchange rate is well down, inflation has surprised to the upside, and the housing market is stirring," Stephens said.