Finance
Hedge funds bet against UK firms as budget looms, says Goldman Sachs
Published by Global Banking and Finance Review
Posted on November 26, 2025
2 min readLast updated: January 20, 2026
Global Banking and Finance Review
Company
Published by Global Banking and Finance Review
Posted on November 26, 2025
2 min readLast updated: January 20, 2026
Hedge funds are betting against UK stocks as the budget looms, with Goldman Sachs noting the largest short positions since 2023.
By Nell Mackenzie
LONDON (Reuters) -Stock-picking hedge funds now have the biggest short positions since 2023 on UK-based stocks exposed to the domestic economy, according to a Goldman Sachs client note.
The group bulked up on these positions ahead of Wednesday's presentation of the highly-anticipated budget, said the note that was sent to clients on Tuesday and seen by Reuters on Wednesday.
Finance minister Rachel Reeves is expected to outline tens of billions of pounds in tax increases.
Since late October hedge funds have been selling large amounts of stocks of companies that primarily operate, offer products and generate revenue within the UK, the note said.
A short position represents a bet that asset prices will fall, whereas a long one is a wager that they will rise.
The budget could deliver nearly 35 billion pounds of savings, Deutsche Bank said in a note on Wednesday. While higher taxes may generate more revenue for the government, they can also slow the domestic economy, economists say.
The number of hedge fund bets that UK-exposed stock values will rise compared to those that are short has shrunk to its lowest level since mid-2023, said the Goldman Sachs note.
Hedge funds had, since July, been mostly buying firms that operate in Britain but sell their goods globally. However, looking just at November, hedge funds have mostly sold these stocks as well, Goldman said.
Hedge funds making long and short bets on stocks in the UK and Europe more broadly, are down around 3% for the month so far, said the note.
Trading losses came from bets on industrials, communications and UK-based companies, Goldman said.
So far this year, stock pickers focused on Europe have returned 8.5% whereas Asia and U.S.-focused funds are up 21% and almost 12%, respectively.
(Reporting by Nell Mackenzie; Editing by Dhara Ranasinghe and Tomasz Janowski)
A hedge fund is an investment fund that employs various strategies to earn active returns for its investors. They often use leverage and derivatives to enhance returns and manage risk.
A short position is an investment strategy where an investor borrows shares and sells them, hoping to buy them back later at a lower price. It profits from a decline in the asset's price.
A long position is an investment strategy where an investor buys an asset with the expectation that its price will rise over time, allowing them to sell it later for a profit.
The UK economy refers to the economic activities and financial systems of the United Kingdom, including trade, industry, and services that contribute to its overall economic performance.
Tax increases are changes in tax policy that raise the amount of tax individuals or businesses must pay. This can affect disposable income and overall economic activity.
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