(Bloomberg) -- The Bank of England will make its first rate cut in August, with the pace of reductions coming faster than previously forecast, Goldman Sachs Group Inc. said in a note.

The first 25 basis-point cut is expected to be followed by similar decreases made at each policy meeting, versus a previous expectations for one reduction per quarter, until the rate reaches 3% in mid-2025, Goldman economists including Sven Jari Stehn said in a note on Sunday.

“This quicker pace is more in line with historical cutting cycles, our updated forecast for the ECB, and our forecast for a quicker decline in inflation,” they said.

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Bloomberg Economics also sees the first rate cut in August as the BOE balances strong underlying price pressures against a weak economy. The bank is expected to hold borrowing costs at 5.25% this week for a third straight meeting. 

Goldman also stressed “significant” uncertainty around the outlook, with a 30% probability that the bank rate will need to stay at 5.25% through all of 2024 “if underlying inflation eases more gradually” than projected.

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