Deutsche Bank expects smaller hike from BoE in August

(Reuters) - Deutsche Bank on Wednesday cut its outlook for interest rate hike by the Bank of England in August to 25 basis point, from 50 basis points forecast earlier.

"With CPI dropping by a lot more than expected, and services CPI coming in below our expectations, we now think a quarter point hike is more likely," at the August decision with the equally surprising CPI print offsetting the rise in wage growth," said Sanjay Raja, senior economist at Deutsche Bank in a note.

It maintained the peak rate forecast of 5.75% as the bank now expects 25 bps hikes in every meeting through November. It had earlier forecast 50 bps raise next month and a final 25 bps hike in September.

(Reporting by Susan Mathew in Bengaluru; Editing by Vinay Dwivedi)