Barclays: Central Bank of England set up this year, and the ECB continues to raise interest rates

On 17 July, Barclays strategists suggested a narrow spread between the British Central Bank policy rate and the European Central Bank deposit rate in December. They expect that the British Central Bank will increase interest rates less this year than the European Central Bank. The fixed-income strategists, including Moyeen Islam and Rohan Khanna, wrote in their report on Thursday that “if the US and Iran resume negotiations and energy prices fall, we believe that the market would be able to lower the expectations of the British Central Bank, rather than the European Central Bank, which is more cautious in terms of economic growth and labour market risks”. The currency market now expects that by the end of December the British Central Bank will have accumulated 37 basis points and the European Central Bank will have accumulated 41 basis points. The Barclay economists expect the ECB to raise interest rates again, while the BCB will maintain interest rates unchanged。