GS raises British economic growth expectations after Labor Party won elections

Goldman Sachs raised its forecast for GDP growth in Britain by 0.1 percentage point in 2025 and 2026 to 1.6% and 1.5%, respectively, after the Labor Party won the elections.

The bank expected that the Labor Party’s fiscal policy agenda would provide a modest boost to demand growth in the near term.

Investors are currently placing more than a 60% chance that the Bank of England will cut rates at its next meeting on August 1.

This will be the first reduction since the beginning of the pandemic, and will provide a better situation for homeowners who have suffered from high mortgage rates since 2024.

The Labor Party won 412 seats, more than the 326 seats necessary to obtain an absolute majority in the House of Commons and be able to form a government on its own.