Mubasher: Barclays expects the US Federal Reserve to slash its borrowing costs this year, having revised its outlook for central bank interest rates as well as growth across major economies.

The UK lender highlighted downside risks from slowing global growth and a strengthening dollar, which would prompt US policymakers to slash rates by 25 basis points (bps) in September, October and December.

Previously, the bank expected two rate-cuts this year.

“This channel of elevated uncertainty, weakness in external demand, and trade policy concerns has grown since the Federal Open Market Committee met in July,’’ the bank’s senior US economist Michael Gapen was quoted by Bloomberg.

On a side note, the bank expects two interest rate cuts by the UK’s Bank of England (BoE) this year and next, citing a mild recession that would be brought about by the country’s departure from the European Union (EU) without a transition deal.

As far as the growth outlook is concerned, the US economy is set to expand by around 2% next year, while the Eurozone would grow by 0.6%, Barclays said.