Goldman Sachs Sees Bank of England Hiking Rates in November

Goldman Sachs has updated its forecast for the Bank of England's interest rate policy. The investment bank now predicts a 25-basis-point hike in November, citing persistent inflation and robust economic growth as contributing factors.

This revision marks a shift from earlier expectations of unchanged rates throughout 2026. The change is partly attributed to recent increases in wholesale energy prices, which have led to a spike in headline inflation exceeding initial estimates.

Britain's economy has shown resilience, expanding at its fastest annual pace in 18 months by July, driven by advances in artificial intelligence and a solid first half of the year. Despite the expected rate adjustment, Goldman Sachs anticipates that the Bank of England will pause further increases as energy prices diminish, leading to rate cuts by late 2027.

This view is bolstered by trader expectations and contextualized by recent actions from the European Central Bank and upcoming decisions from the Federal Reserve and Bank of Japan.