Feb 20th, 2024 – After the UK inflation rate in January 2024 reached 4.00 %, Goldman Sachs (GS) (+0.02% at 4:00 PM EST), in a research note, asserted that there is a high probability that BoE will delay interest rate cuts from May to June, with subsequent stronger interventions during the final semester of 2024. The US investment bank believes the Central Bank will introduce five consecutive 25 basis point cuts, determining a decrease in interest rates from 5.25% to 4%. Also, a terminal rate equal to 3% should be reached by June 2025. As reported by many Goldman Sachs analysts, the main reasons behind this delay are the surprising strength of the UK labor market and the wage growth currently ongoing, but they also predicted a remarkable reduction of the intensity of these trends during the course of the second half of 2024. It is also important to consider the 25% forecasted probability that the cuts will be introduced beyond June, as well as an equal chance that the cuts will reach 50% in case of a recession.
Barclays (BCS) just reported some of its main financial results. The net loss for 2023 fourth quarter reached £111 million, while the net attributable profit (£4.27 billion) was not the same as the 2022 ones and also did not meet the expected value of £4.59 billion. The bank surprisingly announced an additional buyback operation for a total value of £1 billion. More importantly, the measures aimed to reduce structural costs will lead to important savings for the bank (£500 million in 2024), which also got a lot of benefits from the announcement of a strategic overhaul in terms of increase in share price (+12.05 at 16:00 EST).
Author: Piero Foberti