Goldman Sachs economists James Moberly and Sven Jari Stehn pointed out in the report that as inflation slows and the Bank of England cuts interest rates, UK Treasury yields may decline in 2026, and the 10-year yield is expected to fall to 4.0% by the end of the year. Economists say lower household energy bills and weak inflation in basic services have raised expectations that inflation will drop significantly in the coming months. Although fiscal concerns remain, they believe that “analysis shows that the market's penalties on UK Treasury bonds are still excessive” and expect “UK Treasury yields to fall as benchmark interest rates and inflation fall.” Goldman Sachs expects the Bank of England to cut interest rates three times this year, lowering the benchmark interest rate to 3.0%.

Goldman Sachs economists James Moberly and Sven Jari Stehn pointed out in the report that as inflation slows and the Bank of England cuts interest rates, UK Treasury yields may decline in 2026, and the 10-year yield is expected to fall to 4.0% by the end of the year. Economists say lower household energy bills and weak inflation in basic services have raised expectations that inflation will drop significantly in the coming months. Although fiscal concerns remain, they believe that “analysis shows that the market's penalties on UK Treasury bonds are still excessive” and expect “UK Treasury yields to fall as benchmark interest rates and inflation fall.” Goldman Sachs expects the Bank of England to cut interest rates three times this year, lowering the benchmark interest rate to 3.0%.