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.

Rate futures at 0745 GMT showed 25 basis points of cuts priced in by the BoE's Aug. 1 meeting and 54 bps by Dec. 19, compared with Friday afternoon pricing of 17 bps and 42 bps.

Two-year gilt yields fell to a one-week low of 4.367% at 0741 GMT, down 2 bps on the day.

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, in remarks in Washington late on Friday, BoE Deputy Governor Dave Ramsden said he now viewed it as possible that British inflation was on track to fall to and stay at its 2% target, lower than earlier BoE forecasts. (Reporting by David Milliken; editing by Sarah Young)