A big four bank predicts inflation will fall faster than expected and be back within the Reserve Bank of Australia’s target range by October, stoking hope interest rates will fall faster.

After the RBA’s first board meeting for 2024, Westpac revised lower its forecasts, tipping inflation at the top of the central bank’s 2 per cent to 3 per cent target range in the September quarter. It also expects financial markets to soon be pricing inflation at the middle of the band by June 2025, “if not sooner” – a full year or more ahead of the central bank’s forecasts.