FILE PHOTO: A general view of the Bank of England building in London, Britain, June 24, 2025. REUTERS/Carlos Jasso/File Photo

(Reuters) -Goldman Sachs said on Tuesday it now expects the Bank of England (BoE) to trim rates by 25 basis points in November, after last week's softer-than-expected inflation data and signs of labour market strain.

British consumer inflation stood at 3.8% in September, below the central bank's forecast of 4%, raising prospects for a rate cut in November.Goldman, in September, said they expected the BoE to hold rates steady through 2025 before beginning to ease in 2026, "Since then, however, the incoming information has been notably weaker than anticipated"

They added that they expect Britain's budget, announced next month, "will deliver a large, contractionary impulse to the economy."

The Wall Street brokerage now anticipates that the BoE will cut its Bank Rate quarterly to 3% by July 2026 from the current 4%.

Current market pricing indicates around a 40% chance of a 25 basis point BoE rate cut in November, but around a 70% chance of such a cut in either November or December.

Top brokerages, including J.P.Morgan and Morgan Stanley, had earlier expected no further rate cuts this year after the BoE left its key rate unchanged in September.

(Reporting by Joel Jose in Bengaluru; Editing by Sumana Nandy and Alun John)