Goldman Sachs sees BoE raising rate in February 2027
TLT•Goldman Sachs now expects the Bank of England to raise interest rates by 25 basis points in February 2027, in addition to a forecast 25-basis-point hike next week, citing higher energy prices and stronger economic data.
1. Forecast shifts to February
Goldman Sachs now views a February 2027 rate hike as more likely, while still forecasting no change in December. It expects the Bank of England to leave its policy guidance unchanged and reiterate that policymakers stand ready to act if needed to return inflation to target.
2. Next week's expected move
The Bank of England meets on November 5, and markets are pricing in about a 92% probability of a 25-basis-point increase. A hike would be its first rate increase since 2023. Goldman Sachs expects rates to remain at 4.25% through the middle of next year before quarterly cuts from the fourth quarter of 2027 to a 3.25% terminal rate.
