SYDNEY - AUSTRALIANS were on Monday poised for another interest rate cut, as new data showed business confidence deteriorating rapidly and retail sales and house prices flagging.

The central Reserve Bank of Australia (RBA) is widely expected to slash its official cash rate by 50 basis points to 5.5 per cent at its monthly meeting on Tuesday amid a slowdown in the economy.

The anticipated move, which would bring the rate to its lowest level since May 2006, follows the 100 basis point cut in October as the RBA dramatically relaxed its tightening stance in the face of the global financial crisis.

'It's the weakest outlook for the global economy since the end of World War Two,' Citigroup managing director of economics Stephen Halmarick told national news agency AAP. 'It's why our interest rates would reflect that.'

The rate cut would come as Australian business confidence is falling rapidly as a result of the credit turmoil, according to a survey of 303 companies by the Australian Industry Group.

It found that more than 60 per cent of companies felt the crisis had hurt sales, one-third of them saying the impact had been strongly negative.

'This survey, combined with anecdotal evidence from a wide cross-section of sources, confirms that we are in for a rough ride', chief executive Heather Ridout said in a statement.

'It suggests very strongly that the malaise has spread to the real economy and that we are yet to feel the full impacts.'

In other data, the Australian Bureau of Statistics (ABS) said on Monday that annual house prices in the country's cities were growing at their slowest pace in almost three years.

In the three months to September, prices fell on average by 1.8 per cent, it said.

And retail sales suffered their biggest monthly drop in three years in September, a fall of 1.1 per cent for the month compared with a 0.5 per cent increase in August, the ABS said.

Despite the global crisis Treasurer Wayne Swan said he still expected Australia to avoid the worst of the impact and post positive growth.

'We are not immune from the fallout of the global financial crisis, you can see that in the data today, but we are in a far better position than any other country around the world', he told reporters.

'We do expect to see positive economic growth in Australia despite the impact of the global financial crisis.' -- AFP