Goldman Sachs: Predicts the Bank of England will hold steady, interest rates will drop to 3% more quickly

Goldman Sachs predicts that the Bank of England will support keeping interest rates unchanged with a vote result of 7 to 2, without clear guidance for the future. The expected scale of APF reduction is £100 billion. It is predicted that continuous rate cuts from November 2024 to August 2025 will bring the interest rate to 3.00%, with a probability of this basic scenario being 40%. The previous forecast was for an interest rate reaching 3.00% by August 2026. Goldman Sachs pointed out three reasons for adjusting expectations, including increased confidence in wage growth cooling significantly in the coming months, inflation possibly accelerating noticeably in 2025, simple Taylor rules pointing towards faster normalization and most developed countries' central banks continuing to cut rates.