Goldman Sachs Rates Strategy: Revising UK Gilt Yield Forecasts Higher

Key Takeaways

• 1.Goldman Sachs revised its 10y UK Gilt yield forecast to 5.00% at end-2026 (up from 4.40%), reflecting updated expectations for a Bank of England rate hike in November and upward revisions to global benchmark yields.
• 2.Gilt yields exhibit the highest beta to energy price increases and global yields among G10 economies due to higher UK inflation/growth uncertainty, large duration-weighted bond supply, and tight fiscal headroom.
• 3.Near-term curve risks point to flattening into upcoming Bank of England meetings as markets reprice faster rate hikes, though Goldman Sachs expects steeper curves on a 6- to 12-month horizon.

Table of Contents

• Global Rates Notes: Revising Gilt Yield Forecasts Higher
• Exhibit 1: Higher Gilt Yields On BoE Hike
• Exhibit 2: UK 2s10s has remained steep vs Germany
• Exhibit 3: Swap spreads remain wide despite Gilt sell-off
• Global Interest Rate Strategy

Report data

Exhibit 1: Higher Gilt Yields On BoE Hike

Reports in this series

Global Rates Notes is shown in chronological order through this edition, published on September 14, 2026.

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