06:33 AM EDT, 06/13/2025 (MT Newswires) -- Deutsche Bank said it expects the Bank of England Monetary Policy Committee (MPC) to keep the Bank Rate unchanged at 4.25% on Thursday.

However, increased concerns around the labor market are likely, in the bank's view. Global risks in May are likely to give way to domestic risks in June.

Deutsche Bank predicts the MPC to open the door to an August rate cut.

The bank sees a 7-2 vote tally in favor of keeping the Bank Rate unchanged. External MPC members Swati Dhingra and Alan Taylor, Deutsche Bank believes, will vote for a quarter-point rate cut. The bank sees increased risk of a third dissent with Deputy Governor Dave Ramsden feeling more emboldened to cut rates on the back of the weaker labor market data.

Deutsche Bank doesn't estimate any changes to the MPC's forward guidance in June. While discussions on the economic outlook will likely lean more dovish compared with May, it sees the MPC sticking to its three-part guidance: first, that a 'gradual and careful' approach to removing policy restraint is still warranted; second, the MPC continues to monitor the shifts in demand and supply to assess risks of inflation persistence; and third, policy doesn't remain on a pre-set path.

Within the MPC, views regarding the state of the labour market could lea to more dovish language. Despite uncertainty in the recent labor market news, Deutsche Bank expects some members in the MPC to talk up vigilance in assessing the ongoing loosening in the labor market.

The bank sticks to its call for three quarter-point rate cuts this year (August, November and December), and one final rate cut in February 2026, taking Bank Rate to 3.25%. Risks are skewed in a more dovish direction, particularly if the labor market continues to look "shaky" and inflation expectations start to recede from their elevated levels.