Finance
Goldman Sachs delays BoE rate-cut outlook again on energy-driven inflation risks
Published by Global Banking & Finance Review®
Posted on March 12, 2026
2 min readLast updated: March 12, 2026
Quick Summary
Goldman Sachs again delays its projected first Bank of England rate cut due to energy-driven inflation risks, now expecting cuts in July and November 2026 and one in February 2027; other banks have likewise pushed back forecasts amid elevated energy-price risks.
Goldman Sachs Delays BoE Rate Cut Outlook on Energy-Driven Inflation Risks
Revised Rate Cut Expectations Amid Energy Price Concerns
March 12 (Reuters) - Goldman Sachs has pushed back its Bank of England rate-cut outlook for the second time this month, citing inflation risks from higher energy prices, and now expects three 25-basis-point cuts in July and November this year, and one in February 2027.
Potential for April Rate Cut
While a rate cut at the April 30 meeting remains possible if the energy shock eases quickly, Goldman Sachs said policymakers are more likely to wait for clearer data.
Impact of Energy Prices on Policy Decisions
Inflationary Pressures Across Europe
The shift reflects the inflationary impact of higher energy prices across Europe, which is likely to keep the Monetary Policy Committee cautious in the near term, according to the brokerage.
Other Banks Adjust Forecasts
Standard Chartered and Morgan Stanley have similarly pushed back their Bank of England easing forecasts, now projecting the central bank's first rate cut in the second quarter, as energy price spikes linked to the Middle East conflict elevate inflation risks.
Long-Term Rate Outlook
Goldman Sachs Projections
Goldman Sachs expects the bank rate to ultimately settle at 3% by early 2027, but noted that in an adverse scenario the MPC would deliver only one cut this year, and none if the conditions worsen further.
Reporting
(Reporting by Rashika Singh in Bengaluru; Editing by Sherry Jacob-Phillips)
Key Takeaways
- •Goldman Sachs now sees three 25‑bp BoE rate cuts in 2026 (July, November) and one in February 2027, with possibility of April 30 cut only if energy shock eases swiftly; default remains cautious given inflation risks. (goldmansachs.com)
- •Standard Chartered and Morgan Stanley have similarly delayed their BoE easing forecasts, moving their projected first cuts into the second quarter due to Middle East‑related energy price spikes. (sc.com)
- •Goldman Sachs maintains its terminal Bank Rate forecast at around 3%, but warns that in adverse scenarios only one cut may occur this year or none, underscoring uncertainty from energy‑related inflation. (goldmansachs.com)
References
Frequently Asked Questions about Goldman Sachs delays BoE rate-cut outlook again on energy-driven inflation risks
1Why has Goldman Sachs delayed its Bank of England rate cut outlook?
Goldman Sachs delayed its BoE rate cut outlook due to inflation risks stemming from higher energy prices.
2When does Goldman Sachs now expect the BoE to cut rates?
Goldman Sachs expects three 25-basis-point BoE rate cuts in July and November 2024, and one in February 2027.
3What factors are causing caution among policymakers regarding rate cuts?
Rising energy prices across Europe and elevated inflation risks are making the Monetary Policy Committee more cautious.
4What is the projected bank rate by early 2027 according to Goldman Sachs?
Goldman Sachs projects the bank rate to settle at 3% by early 2027, depending on economic conditions.
