STOCKS | Goldman Sachs and Citi Turn Bullish on BOE Rate Hikes, November Seen as a Policy Turning Point

Goldman Sachs and Citi have revised their UK rate forecasts and now expect the Bank of England to resume rate hikes in 2026. According to Sina Finance, Goldman Sachs expects a 25-basis-point hike in November to 4%, while Citi expects one hike later this year and another in early 2027. Goldman Sachs said it expects the Bank of England to keep its benchmark rate at 3.75% by a 6-3 vote at the September 17 meeting, then raise rates by 25 basis points to 4% in November. The bank also lifted its forecast for the peak in UK headline inflation to 3.9% in the first quarter of 2027. Citi expects the Bank of England to raise rates once later this year and again in early 2027, with the moves likely in November and February next year. It also expects the policy signal from the Bank of England's September meeting to lean more toward inflation control. UK consumer prices rose 2.9% year on year in July, up from 2.6% in June and further above the Bank of England's 2% target. The August inflation data will be released the day before the September rate meeting and may affect the vote split on the Monetary Policy Committee.