Inflation is continuing to fall, and interest rates are likely to follow suit

The inflation rate has dropped to 2.2 percent.

It's the first time in more than three years it's returned to the Reserve Bank's one-to-three percent target range.

The Herald's Liam Dann says markets are now pricing in a 100-percent chance, the Reserve Bank will cut the OCR at least 50 basis points next month.

He says there's now serious talk about a 75 basis point cut - which normally only happens during major economic downturns like the Global Financial Crisis.