Danske Bank: Expects the UK Central Bank to gradually cut interest rates to 3.25% next year

Jinshi data, December 19th, Danske Bank stated that due to the continued high service inflation and wage rise, the Central Bank of England is expected to maintain its interest rate unchanged at tonight's meeting. It is expected that the Central Bank of England will cut interest rates at every meeting starting from February 2025 until the second half of 2025, when we expect the pace of rate cuts to slow to only quarterly cuts. This will bring the bank's interest rate to 3.25% in 2025 (currently 4.75%), lower than market expectations. However, we believe there is a risk that the bank will continue to take a gradual approach in the first quarter of next year and may pause the rate cut at the meeting in March.