07:38 AM EDT, 10/22/2024 (MT Newswires) -- Deutsche Bank said it now shifted its call to a two-stage rate-cutting cycle at the Bank of England.

In Stage 1, the bank expects the BoE's Monetary Policy Committee to move the Bank Rate sequentially over the next few months, taking the Bank Rate down to 3.75% by May 2025.

Following that, in Stage 2, Deutsche Bank estimates the MPC to move to a quarterly pace of rate cuts all the way down to 3% -- the mid-point of the bank's medium-term neutral rate estimates.

The risk of 50bps rate cuts has risen in recent weeks, but the conditions for 'forceful' rate cuts have yet to be met, and the window for any outsized rate cuts is likely to be small, stated Deutsche Bank.

Importantly, the bank still sees risks skewed to a higher terminal rate -- especially in light of growing expectations of looser fiscal policy in the British Fall Budget -- with the MPC potentially pausing following Stage 1 of the easing cycle, or at 3.75%.