Goldman Sachs: Expects the Bank of England to hold steady, with rates dropping to 3% more quickly

ChainCatcher message, Goldman Sachs expects the Bank of England to support maintaining interest rates unchanged with a 7 to 2 vote, providing no clear guidance for the future. The expected scale of APF reduction is £100 billion. A series of rate cuts from November 2024 to August 2025 is anticipated to bring rates down to 3.00%, with a 40% probability for this baseline scenario, whereas the previous forecast was for rates to reach 3.00% by August 2026.

Goldman Sachs pointed out three reasons for adjusting expectations, including increased confidence that wage growth will significantly cool in the coming months, inflation progress may accelerate significantly in 2025, the simple Taylor rule points to faster normalization, and most developed country central banks will cut rates consecutively.