Goldman Sachs economists have withdrawn their projection for a September interest rate reduction by the Bank of England, anticipating a more measured approach that would see the benchmark rate lowered to 3% by late March.

"Given the cumulative progress in containing inflation and stronger signals from the BOE, we continue to view an August 7 rate cut as highly probable," economists led by Jari Stehn noted in a client report following this week's unexpectedly high inflation data.

The revised outlook now predicts consecutive rate reductions commencing in November, reaching the 3% terminal rate by March. This marks a significant shift from their previous forecast of consistent cuts at every policy meeting between August and February. The adjustment reflects heightened caution toward persistent price pressures despite recent disinflation trends.