Economists for ANZ National and BNZ are now considering whether the Reserve Bank will cut the Official Cash Rate by 150 basis points next Thursday rather than the 100 basis points consensus settled on by most economists last week. Deutsche Bank and Goldman Sachs JB Were have already tipped a 150 basis point cut to 5%.

Their comments about the growing potential for a record 150 basis point cut come after National Bank's business confidence survey for October showed confidence still in deeply negative territory.

A net 14% of respondents expect their own activity to be weaker in the next year, the worst result since April 1988. Employment intentions matched September's record low of a net 21% expecting to have fewer staff in a year's time. Profit expectations hit an historic low of a net 39% expecting lower profits.

"All in all, this is yet further indication that this economy is not only unwell, but is likely to stay that way for some time to come," BNZ's economists said.

"As for our rate cut call, we'll ponder a while longer. 150bp is in our sights and certainly nothing less than three figures is being contemplated," it said.

ANZ National was itself similarly equivocal, but noted that if pushed it would opt for a 150 basis point rather than 100 basis point move.

"The collective message from the survey remains poor," ANZ National said.

"It is abundantly clear from the survey that the coming 12 months will be the most challenging this economy has faced in more than 2 decades. This one is not looking to be a recession "lite". Our composite growth indicator from the survey is pointing to a substantial contraction in growth," ANZ National said.

It said the market was increasingly split between 100 and 150 basis points. "If pushed, we are more inclined towards a move at the more aggressive end," adding comments from business leaders about a deep recession were a driving factor.

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