Published by Global Banking & Finance Review®
Posted on October 29, 2025
2 min readLast updated: January 21, 2026
Add as preferred source on GoogleGoldman Sachs forecasts a BoE rate cut in November due to weaker inflation data and economic strain, with rates potentially dropping to 3% by 2026.
(Reuters) -Goldman Sachs said on Tuesday it now expects the Bank of England (BoE) to trim rates by 25 basis points in November, after last week's softer-than-expected inflation data and signs of labour market strain.
British consumer inflation stood at 3.8% in September, below the central bank's forecast of 4%, raising prospects for a rate cut in November.Goldman, in September, said they expected the BoE to hold rates steady through 2025 before beginning to ease in 2026, "Since then, however, the incoming information has been notably weaker than anticipated"
They added that they expect Britain's budget, announced next month, "will deliver a large, contractionary impulse to the economy."
The Wall Street brokerage now anticipates that the BoE will cut its Bank Rate quarterly to 3% by July 2026 from the current 4%.
Current market pricing indicates around a 40% chance of a 25 basis point BoE rate cut in November, but around a 70% chance of such a cut in either November or December.
Top brokerages, including J.P.Morgan and Morgan Stanley, had earlier expected no further rate cuts this year after the BoE left its key rate unchanged in September.
(Reporting by Joel Jose in Bengaluru; Editing by Sumana Nandy and Alun John)
Monetary policy refers to the actions taken by a central bank, like the Bank of England, to manage the money supply and interest rates to achieve economic objectives such as controlling inflation and stabilizing the currency.
Interest rates are the cost of borrowing money, expressed as a percentage of the amount borrowed. They are set by central banks and can influence economic activity, including consumer spending and investment.
Inflation is the rate at which the general level of prices for goods and services rises, eroding purchasing power. It is typically measured by the Consumer Price Index (CPI) or the Retail Price Index (RPI).
Financial markets are platforms where buyers and sellers engage in the trade of assets such as stocks, bonds, currencies, and derivatives. They play a crucial role in the economy by facilitating capital allocation and liquidity.
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