Goldman Sachs and Citi Flip to Call for Bank of England Rate Hike in November

The Bank of England's monetary policy meeting on September 17 is expected to be closely watched as two major investment banks, Goldman Sachs and Citigroup, have reversed their positions, predicting a rate hike in November. This shift is driven by the escalating Middle East conflict pushing international oil prices above $100 per barrel, along with UK inflation data re-accelerating further away from the central bank's target.

Goldman Sachs expects the Bank of England to hold its benchmark rate at 3.75% by a 6-3 vote at the September meeting but hike by 25 basis points to 4% in November. Citigroup forecasts one hike later this year, likely in November, followed by another in February 2027.

The resurgent inflation is the key inflection point for the Bank of England's policy decision. The UK Consumer Price Index (CPI) rose 2.9% year-over-year in July, up from 2.6% in June, drifting further away from the Bank of England's 2% target.