(Bloomberg) -- Traders upped bets for further UK interest-rate cuts from the Bank of England this year after policymakers lowered borrowing costs by a quarter point as expected — with two policymakers voting for a bigger reduction.

Money markets added to BOE easing wagers, pricing 67 basis points of further cuts by December, up from 60 basis points before the meeting. UK bonds initially rallied, pushing the yield on the 10-year notes down as much as six basis points to 4.38%, while the pound fell more than 1% to $1.2361.

While policy makers struck a hawkish tone by signaling that only two more reductions are needed to bring inflation to target, the market focused on the fact that the vote for easing was unanimous across the nine-member Monetary Policy Committee. It was the first vote for a cut by Catherine Mann, one of the officials calling for a half-point reduction.  

“The fact that two MPC members voted to deliver a bumper 50 basis-point cut, despite revising up near-term inflation forecasts, gives a sense of how concerned some policymakers are about the headwinds to growth,” Luke Bartholomew, Deputy Chief Economist at abrdn, said. “The Bank’s signals today suggest there is scope for several more rate cuts this year, given the weak growth outlook, and we continue to see rates below 3% over the next two years.”

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