Deutsche Bank: Bank of England's March rate cut may be affected by energy prices

Deutsche Bank analyst Sanjay Raja pointed out in his report that if energy prices remain at current levels, the Bank of England's pace of rate cuts in March may slow down, and policymakers need to consider the impact of rising energy prices on inflation expectations. The next rate cut to 3.5% may be postponed to the second quarter of this year, and the final rate cut may be delayed until the fourth quarter. If energy prices rise to $100 per barrel, the next rate cut may be postponed to the second half of 2026, and the terminal rate may rise to 3.5%. If commodity prices fall back, the Bank of England may maintain Deutsche Bank's baseline expectations, achieving a terminal rate of 3.25% through two rate cuts.