Goldman Sachs Now Sees a Second Bank of England Rate Hike in February 2027
Direct answer
Goldman Sachs now expects the Bank of England to raise interest rates twice: once in November 2026 and again in February 2027. If both quarter point rises happen, Bank Rate would reach 4.25%. This is a forecast from one bank, not a decision by the Bank of England. The Bank itself has not yet decided either move.
What happened
Reuters reported on November 2, 2026 that Goldman Sachs updated its forecast late on Friday, October 30. The bank now expects a 25 basis point rise on November 5, 2026, from 3.75% to 4%, and a second 25 basis point rise in February 2027, from 4% to 4.25%. A basis point is one hundredth of a percentage point, so 25 basis points means 0.25 percentage points.
Goldman pointed to higher energy prices and stronger economic data as reasons for the change. Money markets were pricing in about a 92% chance of a November rise, according to LSEG data cited by Reuters. A November rise would be the Bank of England’s first rate increase since 2023.
Goldman still expects no change in December 2026. After February, it expects Bank Rate to stay at 4.25% through the middle of next year, then fall by a quarter point each quarter from the fourth quarter of 2027, reaching a terminal rate of 3.25%. It also expects the Bank to leave its policy guidance unchanged at the November meeting, repeating that policymakers stand ready to act if needed to bring inflation back to target.
For the November decision itself, see our earlier post on the Bank of England expected to raise rates to 4% on November 5, linked here: https://investclaritypath.com/bank-of-england-expected-rate-hike-november-5-2026/
Why it matters for beginners
Bank Rate is the Bank of England’s main interest rate. It does not set the exact rate on any one mortgage or loan, but banks often move their own rates in the same direction when Bank Rate changes.
A second expected rise matters because it changes the picture from a single precautionary move to a longer period of higher borrowing costs. For borrowers on variable rates, each rise can mean higher monthly payments if lenders pass it on. For savers, higher rates can mean better returns on savings, but that does not cancel out higher costs for people with large loans.
It also matters that this is only a forecast. Forecasts change when new data arrives. Energy prices, inflation figures, and jobs data in the coming months could strengthen or weaken the case for a February rise. Treating a forecast as a done deal is a common beginner mistake, and this story is a good example of why that matters.
What to watch next
First, watch the actual Bank of England decision on November 5, 2026. The November rise is widely expected, but it is not decided until the Bank announces it.
Second, watch the Bank’s statement and Monetary Policy Report on November 5 for clues about February. If the Bank sounds worried about inflation staying high, the February case grows stronger. If it sounds more cautious, markets may scale back February expectations.
Third, watch UK inflation and energy prices over the winter. Higher energy costs were a key reason for Goldman’s updated forecast, so a change in that picture could change the forecast again.
Fourth, watch December. Goldman expects no change in December, so any surprise signal in December would be important for the February outlook.
Frequently asked questions
Has the Bank of England already raised rates to 4%?
No. As of November 2, 2026, Bank Rate is 3.75%. The November rise to 4% is expected, not decided, and the February rise to 4.25% is only a Goldman Sachs forecast.
Why does Goldman expect a second rise in February?
Because of higher energy prices and stronger economic data, according to Reuters reporting on November 2, 2026. Goldman argues the Bank will want to avoid repeating a past mistake of underestimating inflation risks while energy prices stay elevated.
What does a 25 basis point rise mean in plain terms?
It means a rise of 0.25 percentage points. For example, Bank Rate moving from 4% to 4.25% is a 25 basis point rise.
Does this forecast mean borrowing costs will definitely rise twice?
No. It is one bank’s view of the most likely path. The Bank of England makes its own decisions meeting by meeting, based on the latest data.
