Economists expect this Wednesday's monetary policy statement from the Reserve Bank to deliver a quarter-point cut in the official cash rate to a record low of 1.25 per cent.
Market expectations are for a follow-up cut in November, which would take the rate to just 1 per cent.
The Reserve Bank has been loosening monetary conditions since June 2014, when it cut the official cash rate (OCR) to 3.25 per cent.
If a 1 per cent official cash rate fails to stimulate some inflation, the bank will need ponder more unconventional methods, economists said.
Annual inflation came to 1.7 per