Two of Australia’s major banks predict much needed rate relief, as national growth slows to a crawl. In welcome news for cash-strapped mortgage holders, National Australia Bank predicts the next interest rate will be left on hold in June and August before the central bank starts cutting again.But households will have to wait until the second quarter in 2027 before they receive some cash rate relief.NAB chief economist, Sally Auld forecasts recent data shows the economy is losing momentum, shifting their view on interest rates. “The next move in the cash rate is likely to be down, but the timing is uncertain,” she said. “In February, growth was above trend, the economy was operating above capacity and there was uncertainty over the restrictiveness of rates. None of these conditions exist today.”NAB has become the second of the big four banks to call for an interest-rate cut in 2027, following similar predictions from Commonwealth Bank. Commonwealth Bank economists Trent Saunders and Ashwin Clarke said interest rates will be held until May 2027 when the cutting cycle begins.Although the duo noted “the risks to this outlook are tilted towards the cash rate remaining higher for longer”.Australian Bureau of Statistics (ABS) figures released last week show growth of just 0.3 per cent in the March quarter, significantly slower than the 0.9 per cent recorded in the December quarter. While the overall economic pie expanded, GDP per person slid 0.1 per cent for the first decline since March 2025 because the pace of growth was slower than the relative increase in the population.Ms Auld said slowing GDP and NAB business survey suggest momentum in the economy has slowed, meaning that growth has likely peaked for the cycle.“That said, we are cognisant there is still considerable uncertainty around the outlook, both with respect to activity and inflation,” she said. Ms Auld said inflation risks and labour market outcomes would be important to watch in terms of the timing of potential rate relief. Currently headline inflation is at 4.2 per cent, thanks to a temporary cut in the fuel excise, while unemployment sits at 4.5 per cent. “On the prices side, we are still forecasting above target core inflation through to mid-2027. Margins will compress and weaker labour market outcomes are a risk.”She said tighter financial conditions are expected to weigh on housing and activity.“Tighter financial conditions will be reflected in a slowing in house price growth and housing credit growth.”