Royal Bank of Scotland Group Plc changed its Bank of England interest-rate forecast and now sees a cut to 0.5% from 0.75% at this month's meeting. It also sees a second reduction later in the year, having previously predicted no move by the BOE at all until May.

RBS's change of view may be followed by others after Governor Mark Carney and other policy makers said the BOE is looking at whether more stimulus is needed for the economy. Economic data on Monday showed the U.K. economy unexpectedly shrank in November. The year-on-year rate of 0.6% was the weakest since mid-2012.

RBS said there's been an "unmistakable underlying deterioration in the U.K. economic data."