07:58 AM EST, 02/06/2025 (MT Newswires) -- The Bank of England has cut the Base Rate by 25 basis points to 4.50% on Thursday, as widely expected, said Commerzbank.

Following the rate cuts in August and November, it has as such maintained the quarterly rhythm of monetary easing, wrote the bank in a note to clients.

What is surprising, however, is that two of the nine members of the Monetary Policy Committee, including the hawkish Catherine Mann, actually preferred a cut of 50bps, stated Commerzbank.

The BoE sees further progress in the fight against inflation, although it considers it possible that inflation could rise significantly in the short term, pointed out the bank. However, this will be booked as a one-off effect; the BoE doesn't expect second-round effects.

Economic growth is below the expectations of the last inflation report from November. The central bank's economists also don't expect growth to accelerate in the short term.

At the same time, the BoE warns of considerable uncertainty regarding economic and inflation developments, added Commerzbank. Global developments -- not least the United States's tariff plans -- also play an important role here. Against this backdrop, the BoE is sticking to its course of further gradual interest rate cuts.

The bank feels confirmed in its assessment that financial markets are underestimating the potential for further interest rate cuts. Commerzbank still expects three rate cuts totaling 75bps at quarterly intervals.

After Thursday's decision, the risk is more that the BoE won't wait until May for the next step, but will already follow up at the next meeting in March, noted the bank.