Goldman Says a ‘Gilt-Friendly’ UK Budget Will Fade Bond Woes
- Bank favors betting on two-year debt on prospect for BOE cuts
- Expects government to opt for cautious increase in investment
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Struggling UK government bonds will bounce back after the Labour government’s first budget is out of the way at the end of this month, according to strategists at Goldman Sachs Group Inc.
Gilts have trailed peers in the past month on concern the government will ramp up debt supply and change rules that determine how much it can borrow. But that will change once Chancellor Rachel Reeves presents a budget that Goldman strategists expect will be “fairly gilt friendly.”