Barclays(US:BCS) 智通财经网·2025-10-31 13:19Core Viewpoint - Barclays Bank warns that traders are currently underestimating the likelihood of a rate cut by the Bank of England in the upcoming meeting, contrary to the market's expectation of maintaining borrowing costs unchanged [1] Group 1: Rate Cut Expectations - Barclays' economists predict a 25 basis point rate cut, bringing the rate down to 3.75%, with a close 5-4 voting outcome from the Monetary Policy Committee [1] - The current market pricing reflects only a 25% probability of a rate cut, which is inconsistent with the potential reality of a closely contested decision [1] - Goldman Sachs and Nomura also forecast a rate cut in the near future [1] Group 2: Economic Indicators - Following lower-than-expected inflation data in September, swap contract traders have increased their bets on a rate cut [1] - Concerns regarding rising food prices, a key issue for policymakers, are showing signs of easing [1] - The Bank of England's Governor Andrew Bailey has expressed worries about the UK economy operating below its potential and a weak labor market [1] Group 3: Market Reactions - Expectations of a rate cut have boosted UK government bonds, which are on track for their best monthly performance in nearly two years [5] - The British pound has fallen to its weakest level against the euro in 2023 and may record its longest monthly losing streak in nine years [5] - Despite the current inflation rate being nearly double the central bank's target, most strategists expect the Bank of England to delay action until at least December, pending further employment and inflation data [5] - Barclays' strategist believes there are compelling reasons for policymakers to proceed with a rate cut, suggesting that the current market pricing offers an attractive risk-reward scenario for such bets [5]