Following the 25-bps March cut, it expects the central bank to cut 25 bps each in July and November, as opposed to its previous forecast of 25-bps reductions in April and June, the Wall Street brokerage said in a note today.

Data today showed headline inflation for December rose for the first time since July, climbing to 3.4%.

A Reuters poll of economists had expected inflation to rise to 3.3%.

Morgan Stanley joins UBS Global Research, which also revised its BoE rate cut call to March from February after the data.

Inflation in Britain remains the highest among major developed economies, despite the country’s sluggish economic growth.

However, the pace of price increases is expected to slow sharply in the coming months as last year’s rises in utility costs and other government-controlled tariffs fall out of the annual comparison.

The BoE’s next monetary policy meeting is scheduled on Feb 5, where the central bank is widely expected to keep rates steady at 3.75%.

Markets are pricing in about 42.33 basis points of cuts by the end of 2026, according to LSEG data.