LONDON: Goldman Sachs said on Wednesday it now expects the Bank of England to keep interest rates unchanged on Thursday after data showed British inflation was much lower than expected in August.

The consumer price index sank to an 18-month low of 6.7% in August, down from 6.8% in July, defying forecasts by economists polled by Reuters and the BoE itself, who expected an increase.

Goldman Sachs cuts chances of US recession in next one year to 15%

The US bank now expects the BoE to keep its main bank rate unchanged at 5.25% on Thursday and has lowered its forecast for the terminal rate to 5.25% from 5.5% previously.