{"id":63850,"date":"2025-04-30T20:38:23","date_gmt":"2025-04-30T20:38:23","guid":{"rendered":"https:\/\/www.europesays.com\/uk\/63850\/"},"modified":"2025-04-30T20:38:23","modified_gmt":"2025-04-30T20:38:23","slug":"barclays-forecasts-four-uk-rate-cuts-and-reveals-its-worst-case-tariff-scenario","status":"publish","type":"post","link":"https:\/\/www.europesays.com\/uk\/63850\/","title":{"rendered":"Barclays forecasts four UK rate cuts and reveals its worst case tariff scenario"},"content":{"rendered":"<ul class=\"mol-bullets-with-font\">\n<li class=\"\"><strong>Barclays reveals\u00a0 19% jump in profits to \u00a32.72billion over just three months<\/strong><\/li>\n<\/ul>\n<p class=\"author-section byline-plain\">By <a href=\"https:\/\/www.thisismoney.co.uk\/profile-711\/mike-sheen.html\" class=\"author\" target=\"_blank\" rel=\"noopener\">MIKE SHEEN<\/a> <a rel=\"nofollow noreferrer noopener\" target=\"_blank\" href=\"https:\/\/twitter.com\/intent\/follow?screen_name=michaeljsheen&amp;tw_p=followbutton\" class=\"twitter-follow-author\"><\/a> <\/p>\n<p class=\"byline-section\"> Updated:  14:10 EDT, 30 April 2025   <\/p>\n<p class=\"mol-para-with-font\">Barclays expects the Bank of England to cut <a style=\"font-weight: bold;\" target=\"_self\" href=\"https:\/\/www.thisismoney.co.uk\/money\/mortgageshome\/article-11885727\/When-rates-start-fall-Base-rate-forecasts.html\" id=\"mol-397219b0-2591-11f0-a638-3b16450792ac\" rel=\"noopener\">interest rates<\/a> four more times, as it responds to \u2018gradually slowing\u2019 economic growth.<\/p>\n<p class=\"mol-para-with-font\">The banking giant&#8217;s new \u2018baseline scenario\u2019 forecasts three more BoE cuts in 2025 and one more next year, taking base rate from its current level of 4.5 per cent to 3.5 per cent by the end of 2026.<\/p>\n<p class=\"mol-para-with-font\">Barclays, which posted a \u00a32.72billion pre-tax profit for the first quarter on Wednesday, expects the UK economy to muster uninspiring growth of 1 per cent this year, followed by GDP growth of just 1.4 per cent over the next four years.<\/p>\n<p class=\"mol-para-with-font\">It said: &#8216;Following a somewhat encouraging 2024, the growth in the UK economy is gradually slowing when compared to consensus at FY24, though restrictive monetary policy continues to loosen.&#8217;\u00a0<\/p>\n<p class=\"mol-para-with-font\">But the lender also warned of the greater potential for its \u2018downside\u2019 scenarios, after US President <a style=\"font-weight: bold;\" target=\"_self\" class=\"\" href=\"https:\/\/www.thisismoney.co.uk\/money\/markets\/article-14643303\/How-major-stock-markets-moved-Trumps-tariff-Liberation-Day.html\" rel=\"noopener\">Donald Trump unleashed his \u2018liberation day\u2019 tariffs<\/a>, sparking fears for the health of the global economy.<\/p>\n<p class=\"mol-para-with-font\">Under the bank\u2019s worst-case forecasts the UK economy will shrink 1.3 per cent this year, followed by a 2.8 per cent slump in 2026.<\/p>\n<p>   <img decoding=\"async\" id=\"i-767ab45b9c907ba8\" src=\"https:\/\/www.europesays.com\/uk\/wp-content\/uploads\/2025\/04\/97856735-14662899-image-a-1_1745996759172.jpg\" height=\"399\" width=\"634\" alt=\"Barclays reported a 19% rise in pre-tax profits to \u00a32.72billion for the three months to 31 March\" class=\"blkBorder img-share\" style=\"max-width:100%\" loading=\"lazy\" \/>   <\/p>\n<p class=\"imageCaption\">Barclays reported a 19% rise in pre-tax profits to \u00a32.72billion for the three months to 31 March<\/p>\n<p class=\"mol-para-with-font\">Barclays said: \u2018A sustained drop in consumer spending due to high household debt levels and affordability loss amid stagnant wages leads to a significant reduction in aggregate demand.<\/p>\n<p class=\"mol-para-with-font\">\u2018The economic slowdown leads to rising unemployment rates as lay-offs intensify. UK and US unemployment peaks at 8.4 and 7.5 per cent respectively, during 2026.\u2019<\/p>\n<p class=\"mol-para-with-font\">The lender told shareholders it \u2018continues to monitor the heightened uncertainty in the near-term macroeconomic outlook, especially in the US\u2019.<\/p>\n<p class=\"mol-para-with-font\"><a style=\"font-weight: bold;\" class=\"\" rel=\"nofollow noreferrer noopener\" target=\"_blank\" href=\"https:\/\/investing.thisismoney.co.uk\/quote\/BARC\">Barclays shares<\/a> rose 1.64 per cent in early trading to 302.9p, having rocketed 48 per cent over the past year.\u00a0<\/p>\n<p class=\"mol-para-with-font\">It increased provisions for loans expected to turn sour to \u00a3643million from \u00a3513million a year ago, largely driven by \u00a374 million put by for \u2018elevated US macroeconomic uncertainty\u2019.<\/p>\n<p class=\"mol-para-with-font\">The bank added: \u2018The broadening range of outcomes coupled with a perceived lag in consensus suggests that a greater weighting\u2026should be applied to the group&#8217;s Downside scenarios to reflect the macroeconomic uncertainty.\u2019<\/p>\n<p class=\"mol-para-with-font\">Barclays has an exposure to the mounting trade war sparked by US President Donald Trump through its sizeable operations in America.<\/p>\n<p class=\"mol-para-with-font\">The bank reported a 19 per cent rise in pre-tax profits to \u00a32.72billion for the three months to 31 March and kept its full-year outlook unchanged.<\/p>\n<p class=\"mol-para-with-font\">However, it now expects net interest income &#8211; a key measure of profitability for retail banks &#8211; to more than \u00a312.5 billion from around \u00a312.2 billion previously, with some \u00a37.6 billion now expected from the UK arm.<\/p>\n<p>   <img decoding=\"async\" id=\"i-9e34598c28c4dd48\" src=\"https:\/\/www.europesays.com\/uk\/wp-content\/uploads\/2025\/04\/97856739-14662899-Barclay_s_baseline_forecasts_suggests_steady_if_uninspiring_econ-a-3_1745996842203.jpeg\" height=\"276\" width=\"634\" alt=\"Barclay's 'baseline' forecasts suggests steady, if uninspiring economic growth ahead\" class=\"blkBorder img-share\" style=\"max-width:100%\" loading=\"lazy\" \/>   <\/p>\n<p class=\"imageCaption\">Barclay&#8217;s &#8216;baseline&#8217; forecasts suggests steady, if uninspiring economic growth ahead\u00a0\u00a0<\/p>\n<p>   <img decoding=\"async\" id=\"i-c45841ed2e476638\" src=\"https:\/\/www.europesays.com\/uk\/wp-content\/uploads\/2025\/04\/97856741-14662899-image-a-4_1745996845761.jpg\" height=\"252\" width=\"634\" alt=\"Barclays' worst-case 'downside' forecasts points to two years of economic contraction\" class=\"blkBorder img-share\" style=\"max-width:100%\" loading=\"lazy\" \/>   <\/p>\n<p class=\"imageCaption\">Barclays&#8217; worst-case &#8216;downside&#8217; forecasts points to two years of economic contraction\u00a0<\/p>\n<p class=\"mol-para-with-font\">The results show Barclays also delivered around \u00a3150million in cost savings in the first quarter as part of its ongoing overhaul.<\/p>\n<p class=\"mol-para-with-font\">Boss C. 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This does not affect our editorial independence.<\/p>\n<p><a href=\"https:\/\/www.thisismoney.co.uk\/money\/diyinvesting\/article-1718291\/Pick-best-cheapest-investment-Isa-platform.html?ico=tim-affiliate_desktop_bottom-link-click\" target=\"_blank\" class=\"optional-btn-wrapper\" rel=\"noopener\">Compare the best investing account for you <\/a><\/p>\n<p>                    Share or comment on this article:<br \/>\n                        Barclays forecasts four UK rate cuts and reveals its worst case tariff scenario<\/p>\n<p>        <script async src=\"https:\/\/platform.twitter.com\/widgets.js\" charset=\"utf-8\"><\/script><\/p>\n","protected":false},"excerpt":{"rendered":"Barclays reveals\u00a0 19% jump in profits to \u00a32.72billion over just three months By MIKE SHEEN Updated: 14:10 EDT,&hellip;\n","protected":false},"author":2,"featured_media":63851,"comment_status":"","ping_status":"","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[3,4],"tags":[748,393,4884,1232,1284,1144,712,1283,16,15,1764],"class_list":{"0":"post-63850","1":"post","2":"type-post","3":"status-publish","4":"format-standard","5":"has-post-thumbnail","7":"category-uk","8":"category-united-kingdom","9":"tag-britain","10":"tag-england","11":"tag-great-britain","12":"tag-money","13":"tag-moneymarkets","14":"tag-northern-ireland","15":"tag-scotland","16":"tag-thisismoney","17":"tag-uk","18":"tag-united-kingdom","19":"tag-wales"},"share_on_mastodon":{"url":"https:\/\/pubeurope.com\/@uk\/114428845029285781","error":""},"_links":{"self":[{"href":"https:\/\/www.europesays.com\/uk\/wp-json\/wp\/v2\/posts\/63850","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.europesays.com\/uk\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.europesays.com\/uk\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.europesays.com\/uk\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.europesays.com\/uk\/wp-json\/wp\/v2\/comments?post=63850"}],"version-history":[{"count":0,"href":"https:\/\/www.europesays.com\/uk\/wp-json\/wp\/v2\/posts\/63850\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.europesays.com\/uk\/wp-json\/wp\/v2\/media\/63851"}],"wp:attachment":[{"href":"https:\/\/www.europesays.com\/uk\/wp-json\/wp\/v2\/media?parent=63850"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.europesays.com\/uk\/wp-json\/wp\/v2\/categories?post=63850"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.europesays.com\/uk\/wp-json\/wp\/v2\/tags?post=63850"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}