Goldman Sachs expects the Bank of England to cut interest rates next week, forecasting a 6–3 vote in favour of easing policy.
In a note published yesterday, Goldman economist James Moberly said the Monetary Policy Committee is likely to back a 25-basis-point reduction at its December 18 meeting, following last month’s narrow 5–4 decision to keep rates unchanged.
Under Goldman’s scenario, Governor Andrew Bailey and Deputy Governor Clare Lombardelli would switch from the “no change” camp to support a cut. That would leave Chief Economist Huw Pill and external members Megan Greene and Catherine Mann voting to hold rates steady, reflecting ongoing concerns about inflation.
Moberly noted that since the previous MPC meeting, economic data have generally softened, with multiple indicators pointing to further weakening in the labour market.
While measures announced in the Budget may provide a modest short-term lift to growth, he argued they are also likely to reduce inflation next year, strengthening the case for an immediate rate cut. He added that the exact number of dissenting votes could still hinge on next week’s data releases, including the latest unemployment and wage figures due on Tuesday.
