Goldman Sachs forecasts that the Bank of England could reduce interest rates by as much as six times by mid-2026, predicting a decline to 3.25%. This projection is anchored in observations of weaker economic activity, lower inflation, and a softening labor market, as indicated by November's meager GDP growth of 0.1%. Market analysts foresee at least two cuts this year, with the possibility of a 25 basis-point reduction in February, initiating a series of quarterly cuts. A new MPC member has expressed support for this approach, suggesting it may help achieve economic stability.
The Bank of England could deliver as many as six interest rate cuts by the middle of next year, driven by weaker economic activity and lower inflation.
Goldman Sachs predicts rates will drop to 3.25% by mid-2026, citing sluggish demand and lower-than-expected GDP growth as key factors.
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