BofA Adjusts Bank of England Rate Cut Projections

Bank of America (BofA) has revised its projections for the Bank of England's interest rate adjustments, following a trend set by other major financial institutions. Initially, BofA had foreseen three additional rate cuts by the BOE scheduled for August, September, and November. However, mirroring the recent decisions of Goldman Sachs and Citi, BofA has now pulled its September rate cut prediction. The firm now anticipates only two further reductions in the Bank of England's interest rate, with the next expected in August and a subsequent one in November. This refined outlook suggests a more cautious approach to monetary easing, with BofA's forecast indicating a terminal rate of 3.50%, a notable divergence from the immediate sequential cuts previously contemplated.

Major Financial Institutions Reassess Bank of England's Rate Trajectory

In a significant shift in economic forecasting, Bank of America (BofA) announced on Thursday, July 18, 2025, that it has withdrawn its prediction for a September interest rate cut by the Bank of England (BOE). This move aligns BofA with recent similar revisions made by other prominent financial entities, specifically Goldman Sachs and Citi, both of whom had earlier rescinded their own September rate cut forecasts for the UK's central bank. Prior to this adjustment, BofA had penciled in a more aggressive schedule of three consecutive rate reductions by the BOE, slated for August, September, and November.

However, BofA's updated outlook presents a distinct perspective compared to its counterparts. While both Goldman Sachs and Citi also scaled back their September expectations, BofA's revised model suggests a more measured pace for the BOE's monetary policy adjustments. Instead of consecutive cuts, BofA now projects only two additional rate reductions. The first of these is still anticipated in August, but the second is now pushed back to November, skipping September entirely. Furthermore, BofA's analysis posits that the Bank of England's terminal rate, the lowest point to which the interest rate is expected to fall in this cycle, will settle at 3.50%. This differs from some other projections and underscores a belief that the BOE will maintain a relatively higher interest rate compared to previous expectations.

The collective decisions by these leading financial institutions highlight a growing consensus among market analysts regarding a more cautious and prolonged approach to interest rate adjustments by the Bank of England. This evolving narrative could have significant implications for market participants, influencing investment strategies and economic outlooks across various sectors. As the BOE navigates the complex economic landscape, these revised forecasts provide critical insights into the potential trajectory of the UK's monetary policy.