Goldman Sachs: BOE rate outlook post-September meeting

Goldman Sachs expects the Bank of England to cut interest rates by 25 basis points at its November meeting, following the recent decision to keep the bank rate on hold.

Key points:

1. Details of the Bank of England decision:

   • The Monetary Policy Committee voted 8-1 The bank interest rate will remain unchanged, and government share reductions will be maintained at the same level. 100 billion pounds.

2. Pointing to the gradual approach:

   • The MPC stressed the “gradual approach” to removing policy constraints, indicating its preference for continued adjustments rather than aggressive cuts.

3. Future Discounts Expectations:

   • Goldman Sachs expects 25bp cut In November, with subsequent cuts to the bank rate, 3% by September 2025.

4. Expected gradual changes:

   • The MPC is likely to favor quarterly adjustments rather than larger 50 basis point cuts, in line with its cautious stance.

5. Market Pricing Considerations:

   • Expectations remain conservative compared to market prices, reflecting a probability-based approach to future rate cuts.

conclusion:

Goldman Sachs maintained its expectations of a gradual rate cut by the Bank of England, expecting a measured approach to monetary policy in line with economic conditions.

For banking business ideas, Check out eFX PlusFor a limited time, get a 7-day free trial, Basic for $79/month, and Premium for $109/month. Get it here.