The rates predictions come as the crisis prompted another multi-billion-dollar US Government bail-out yesterday this time to rescue troubled Citigroup and revelations that Australia's superannuation fund returns in October were the worst ever because of the sharemarket rout.

Superannuation researcher Super Ratings found that the median balanced super fund lost 6.65pc of its value in October and 17.61pc for the 12 months previous to that.

The British Government was also set late last night to announce plans to slash taxes and boost spending to avert recession.

The Reserve Bank of Australia meets next Tuesday and is certain to cut rates for the third successive month.

Debt futures markets expect it to cut the cash rate by a massive 1.25 percentage points and they expect the official rates to fall from 5.25pc to 2.75pc by April - the lowest level since January 1960.

This would mean repayments on an average $250,000 standard variable home loan dropping from $1790 a month to $1380 a month if the banks passed on the full reductions.

But ANZ economist Riki Polygenis who expects a cut of half a percentage point on Tuesday said the futures market was "getting a little over-excited".

She tipped rates would fall to 4pc in the June quarter next year.

ABN Amro, the Commonwealth Bank and Access Economics are forecasting 0.75 percentage point rate cut next week.

Access's Chris Richardson said a one-percentage-point cut was not out of the question.

"The Reserve has gone out of its way to cut more than people think in the last couple of months, and it is doing it because it wants those cuts to have impact," he said.

"Interest rates in Australia are falling very fast ... because Australia's economic prospects are weakening fast.

"Growth will slow, profits will slump and joblessness will rise."

Also yesterday, Access said the federal budget was heading for a $1.16billion deficit next financial year.

Reserve Bank Governor Glenn Stevens has given the green light to a budget deficit if it involves "prudent" borrowing, although according to Newspoll 56pc of Australians would be concerned if the budget went into deficit.