National Australia Bank is the second of the big four to reverse its interest rate forecasts, predicting the Reserve Bank will need to slash rates twice in 2015.
The big four banks are now evenly divided on interest rates as business conditions worsen, commodity prices weaken and unemployment is tipped to rise.
NAB has joined Westpac in predicting the RBA will cut the cash rate from its present record low of 2.5 per cent to two per cent.
Commonwealth Bank and ANZ are predicting two rate hikes to three per cent in 2015, but are constantly reviewing their stance.
NAB economists blamed falling commodity prices and a "more severe deterioration" in the labour market for their revised forecasts.
They now predict the RBA will cut the cash rate in March and August before leaving it on hold until late 2016.
The change of heart occurred as NAB's November business survey showed confidence at its lowest point since the lead-up to the September 2013 federal election.
Confidence has declined for the fourth month in a row.
The mining sector was in the negative zone, as key commodity prices like iron ore dropped to five-year lows.
NAB's business conditions measure also fell, undoing a six-year-high spike in October, as activity slowed in the retail, manufacturing and service industries.
Profitability, trading and employment worsened.
The results of the business survey sparked a sell-off in the Australian dollar, pushing it down to 82.55 US cents for the first time since June 2010.
But businesses are yet to benefit from a weaker currency.
"We are yet to see any clear beneficiaries of the Australian dollar depreciation," NAB economists said.
NAB and Westpac had previously expected the RBA to raise rates in 2015, lifting the cash rate to three per cent by the end of next year.
But NAB now also expects unemployment to peak at about 6.75 per cent from a present level of 6.2 per cent.
CommSec chief economist Craig James, who expects the cash rate to be lifted in the second half of 2015, said the bad news on business confidence and conditions would be unlikely to stop the RBA from raising rates.
"Overall, retail sales have been relatively strong in the lead-up to Christmas and this should translate to an improvement in business conditions and profitability in coming months," he said.
"The depreciation of the Australian dollar should support a number of sectors in coming months."
