Goldman Sachs expects Bank of England to raise rates in February
The brokerage predicts a 25-basis-point hike next month following a forecast for a quarter-point increase next week.
Goldman Sachs expects the Bank of England (BoE) to increase interest rates by 25 basis points in February, according to a Reuters report cited by The Economic Times.
The brokerage's assessment, published late on Friday, also forecasts a quarter-point increase next week. This follows expectations that the central bank will leave rates unchanged in December.
The central bank is scheduled to announce its monetary policy decision on November 5. Financial markets currently anticipate a 25-basis-point hike, with LSEG data showing an approximately 92 per cent probability of such a move.
Goldman Sachs cited stronger-than-expected economic data and elevated energy prices for its February forecast. A rate increase would be the BoE's first since 2023 as policymakers address persistent inflationary pressures.
The brokerage expects the Bank of England to maintain its policy rate at 4.25 per cent through the middle of next year. It anticipates a series of quarterly rate cuts starting from the fourth quarter of 2027, eventually settling at a terminal level of 3.25 per cent.
Goldman Sachs expects the BoE to leave its policy guidance unchanged at the upcoming meeting. The firm reiterated that policymakers remain prepared to act to bring inflation back to its target.