NAB expects rate cut next week

A major bank has changed its RBA rates forecast because of weaker than expected inflation, tipping a cut at next week's board meeting.

National Australia Bank expects the central bank to cut the cash rate to a new record low next week. (AAP)

National Australia Bank expects the central bank to cut the cash rate to a new record low next week.

NAB had previously forecast no change in the cash rate at the Reserve Bank of Australia's May board meeting, but much weaker than expected March quarter inflation data has drastically increased the chances of a rate cut.

"In a close call, NAB now expects the board to vote to reduce the cash rate by 25bps at the May Board meeting," its economists said.