The bank has stated in a research note that they predict by the end of 2022 the economy will have shrunk for two consecutive quarters, which is the official definition of a recession.
An economist at Goldman said: “Concerns around cost of living pressures in the UK have continued to intensify on the back of the worsening energy crisis.
“Real consumption is still likely to decline significantly.”
The investment bank has also reconsidered its previous estimates the UK economy will grow next year.
They predicted the economy would grow by 1.1 percent in 2023, but now say it will contract by 0.6 percent.
In July, the CEO of Goldman Sachs, David Solomon, said that the odds of a recession were greater than normal.
In an interview with CNN, he said that people must “prepare for an environment of high inflation” and added that “there’s a good chance that we haven’t reached the peak yet.”
He said: “Anytime you have high inflation and go through an economic tightening, you wind up having some sort of an economic slowdown.
“So, I think the chances that we have a recession are high.”
READ MORE: Only way to save economy’ Liz Truss tax cut reforms backed
The CBI has also said that prices have risen by the most in 20 years for business and professional service companies, and the most since 2006 in the consumer sector.
The service industry dominates the economy, as it was responsible for 78 percent of economic output and 82 percent of employment between January and March 2022.
British inflation also rose to 10.1% last month and the Bank of England has predicted it will rise to 13% in October when energy bills are set to rise.
Last week, it was announced the energy bills will rise by 80% as the new energy price cap is set to be £3,549 annually for the average household