PHOTO: The National Australia Bank 

The National Australia Bank have brought forward their rate cut forecasts, now suggesting there will be a cut next month.

Their decision was based on the muted impact of the income tax cuts, which has “failed to offset growing weakness in the household sector.”

“With monetary policy involving longer lags, we think the urgency to lower rates sooner has increased,” NAB economists Gareth Spence and Kieran Davies said.

“We previously anticipated some further support from fiscal policy but now believe this is unlikely in the near term,” they advised.

NAB have also brought forward their next rate cut to December, which would bring the official cash rate down to 0.5 per cent.