Deutsche Bank are forecasting a close call at the Bank of England meeting this week:
- 5-4 vote in favour of a 25bp cut
- expect the Monetary Policy Committee to deliver its first rate cut of the cycle
- this will lower the Bank Rate to 5%
- think the case for a rate cut rests on a shifting reaction function within the MPC, including stronger reliance on its inflation projections, forward-looking indicators of wage and services prices, as well as firming real rates
