07:08 AM EST, 12/20/2024 (MT Newswires) -- The Bank of England Thursday decided to leave Bank Rate unchanged at 4.75% as expected, said UBS.

The decision was supported by six Monetary Policy Committee members, while three voted for a 25bps rate cut -- a slightly more dovish vote than the bank expected.

As before, UBS still thinks that the BoE's pause in December will be followed by a cut in February 2025 -- the first policy meeting of the year. The bank continues to expect cumulative rate cuts of 150bps next year with 25bps cuts each in February, May, August, September, November and December, to 3.25% by end-2025.

This implies the Bank cutting rates once per quarter in H1 2025 before accelerating the pace of cuts to every meeting in H2 2025, stated UBS. In contrast to the BoE's projections, the bank's baseline foresees inflation returning to the 2% target already in late 2025/early 2026, which should allow the BoE to accelerate the pace of cuts in H2 2025.

However, UBS acknowledges the risk of slower quarterly cuts throughout 2025, if the United Kingdom Budget measures were to boost inflation in line with the BoE's estimates.