Goldman Sachs Asset Management said it does not expect the Bank of England to cut interest rates again this year, citing persistent inflation and signs of resilience in the labour market. The firm noted that, while headline price pressures have eased, underlying inflation remains sticky enough to keep policymakers cautious. In addition, evidence that the labour market is stabilising should give the Monetary Policy Committee room to hold policy steady through year-end.
However, Goldman Sachs AM stressed that November’s budget will be a key variable. Should fiscal measures add to the drag on UK growth, the BoE could feel compelled to respond more quickly to support the economy. “We do not see the BoE cutting rates for the rest of the year, but acknowledge that hinges to an extent on the outcome of November’s budget,” the firm said.
On balance, GSAM’s base case is that the BoE will resume its easing cycle in February 2026, when inflation is expected to have slowed further and growth headwinds become clearer. This article was written by Eamonn Sheridan at investinglive.com.