Bloomberg News

Barclays Capital Cuts Pound Forecasts on Outlook for BOE Rates

June 03, 2011

June 3 (Bloomberg) -- Barclays Capital cut its six-month and one-year forecasts for the pound, citing the outlook for Bank of England interest rates after data showed weaker than expected U.K. services growth last month.

Barclays Capital cut its six-month forecast to $1.74 from $1.76 and 85 pence per euro from 84 pence per euro. The one-year forecasts were reduced to $1.76 from $1.80 and 82 pence per euro from 80 pence, Paul Robinson, London-based head of European currency strategy at the investment-banking unit of Barclays Plc, wrote in an e-mailed note today.

The investment-banking unit of Barclays Plc pushed back its forecast for the central bank to start raising interest rates to November from August. Services industry expansion was the slowest in three months in May, Markit Economics Ltd. and the Chartered Institute of Purchasing and Supply said today.

“We continue to expect some appreciation for the pound against both the dollar and euro, but in trade-weighted terms pound is likely to remain significantly weaker than its pre- crisis norm,” Robinson said.

The pound depreciated 0.6 percent to 89.04 pence per euro and climbed 0.1 percent to $1.6392 as of 4:52 p.m. in London.

--Editors: Matthew Brown, Mark McCord

To contact the reporter on this story: Lucy Meakin in London at

To contact the editor responsible for this story: Daniel Tilles at

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