The cash rate is widely expected to be cut when the Reserve Bank board meets on Tuesday.
The probability of an August rate cut went from strong to a near certainty after low June quarter inflation figures were followed with bearish rhetoric from Reserve Bank governor Glenn Stevens last week.
All but one of the 13 economists surveyed by AAP expect the RBA to cut the cash rate by a quarter of a percentage point, from the already record low of 2.75 per cent.
Mr Stevens said subdued business confidence was a concern and needed to improve in order to help rebalance Australia's economy as the mining investment boom winds down.
"There are clearly signs of policy working in this respect, though not, to date, by so much that we see a serious impediment to further easing, were that to be appropriate from an overall macro-economic point of view," he said.
Mr Stevens' comments indicated a cut was on the cards at the RBA's August meeting, HSBC chief economist Paul Bloxham said.
"The first critical piece of information he gave us was that the RBA's interpretation was that inflation is low enough to leave them with scope to cut rates further," Mr Bloxham said.
"The other part of the story was a fairly downbeat take on the rebalancing that's happening in Australia's economy."
