Goldman Sachs expects the Bank of England to cut interest rates three times this year, with the 10-year government bond yield possibly falling to 4.0% by the end of the year.
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Goldman Sachs economists James Moberly and Sven Jari Stehn stated in a report that with inflation easing and the Bank of England cutting interest rates, UK government bond yields may decline, and the 10-year yield is expected to fall to 4.0% by the end of this year. They believe that lower household energy bills and weak core services inflation have raised expectations for a significant drop in inflation over the coming months. Despite fiscal concerns, their analysis shows that the market's punishment of UK government bonds has been excessive. Goldman Sachs expects the Bank of England to cut interest rates three times this year, lowering the benchmark rate to 3.0%.
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