Interest rate futures on Monday fully priced in a first quarter-point interest rate cut by the Bank of England for August and see two rate cuts before the end of the year, an earlier start to cuts than priced in last week; potentially good news for many mortgage borrowers.

Rate futures yesterday morning showed 25 basis points of cuts priced in by the BoE’s 1 August meeting and 54 bps by 19 December, compared with Friday afternoon pricing of 17 bps and 42 bps.

Last week financial markets trimmed expectations for BoE rate cuts in response to slightly higher than expected British inflation and a shift in expectations for cuts by the U.S. Federal Reserve.

However, late on Friday, BoE deputy governor Dave Ramsden said he now viewed it as possible that inflation in Britain was on track to fall to and stay at its 2% target, lower than earlier BoE forecasts.

He said “For me the balance of domestic risks to the outlook for UK inflation, relative to the February MPR (Monetary Policy Report) forecasts, is now tilted to the downside, with a scenario where inflation stays close to the 2% target over the whole forecast period at least as likely.”

The Bank’s forecast covers the next three years. “This leaves the UK as less of an outlier and more of a laggard in terms of recent inflation performance, and one that is now catching up quickly,” he added.

The Monetary Policy Committee (MPC) will hold its next meeting in May, but it is not anticipated to begin cutting interest rates until later in the summer.