Goldman Sachs forecasts for the next meeting of the Bank of England scheduled for August
- We expect the Bank of England to raise interest rates by another 50 basis points in August, based on the supporting data.
- This is expected to provide additional support for the GBP.
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In contrast to last fall, inflation data and economic activity now point to an upward trend. This means that the Bank of England faces less of a dilemma balancing raising interest rates and supporting economic activity.
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We are skeptical about the notion that aggressive interest rate increases could weaken the pound by affecting growth. We believe that as long as the Bank of England is committed to raising real rates, the pound will remain supported, although other domestic assets such as house prices and stocks could take a hit.
August 3 is the next meeting:
