The Reserve Bank of Australia is expected to cut the cash rate by 25 basis points at its July meeting, ANZ Group's (ASX:ANZ, NZE:ANZ,) head of Australian economics, Adam Boyton, said in a Wednesday ANZ note.

Boyton cited a weak six-month trend in retail sales, a stalling in consumer confidence's prior uptrend, and ongoing uncertainty around US trade policy regarding the expiration of the tariff pause on July 9.

The central bank is expected to ease monetary policy as "the path of least regret." ANZ is forecasting another 25-basis-point cash rate reduction in August. But it will reassess the likely pace of easing after the July meeting and press conference.

The recent softness in retail trade means that it is likely to be seen as a lower and less consequential risk than waiting for consumer demand to lift, Boyton said.

ANZ also expects an extended pause once the cash rate reaches 3.35%, to enable an assessment of the impact of the cumulative 100 basis points of rate cuts.