Goldman Sachs expects the BoE to raise rates to 4.25% by February 2027, while it then sees the BoE keeping rates unchanged at 4.25% until mid-2027 before cutting quarterly from Q4 2027 to a 3.25% terminal rate

Goldman Sachs expects the BoE to raise rates to 4.25% by February 2027, while it then sees the BoE keeping rates unchanged at 4.25% until mid-2027 before cutting quarterly from Q4 2027 to a 3.25% terminal rate.

This is a sell-side house view rather than anything from Threadneedle Street itself, and the historical pattern is that single-bank path forecasts move Sonia only when they mark a sharp departure from consensus and the bank in question has recent form on the call. What stands out here is the shape: a tightening leg from here, an extended hold, then a gradual cutting cycle to a terminal rate above where markets have typically anchored neutral. Out-of-consensus hike calls on the BoE have tended to matter most at the front end and belly of the curve, where the gap between house views and OIS pricing is expressed, and they gain traction only when subsequent inflation and wage prints validate the direction. The relevant comparison is the forecaster's prior track record on this cycle, since desks that called the turning points early have historically been given more weight than late arrivals to a consensus. The follow-ons are whether peer houses converge toward a similar path, how the MPC's own rhetoric and forecast round sit against it, and whether the data flow between now and the first projected hike window supports repricing. As a research view rather than policy communication, the signal is about positioning and consensus drift, not about the Bank's intent.