【GBP Fixed Deposit】 GBP fixed deposit interest rates up to 16.8% countdown Citibank expects the UK to cut interest rates again in April

The Bank of England will hold its interest rate decision next Thursday (March 19). Citibank’s investment strategy and asset allocation chief Liao Jiahao said that this time they may not cut rates. Citibank analysts expect rate cuts of 25 basis points in April, July, and November this year. The GBP/USD three-month forecast is 1.31, with a 6 to 12-month forecast of 1.23.

Click the chart 👇👇👇👇 to see GBP fixed deposit interest rate comparisons

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Today (March 12), GBP is quoted at 1.3445. The last rate cut by the Bank of England was 0.25% at the end of last year, bringing the policy rate to 3.75%.

Although Citibank expects only three rate cuts totaling 0.75% in the next two quarters, recent moves by five major banks have been to cut GBP fixed deposit rates, including Standard Chartered reducing the 7-day annual rate by 1.8%, now at 12%, and others like CCB and HSBC also lowering rates; only digital banks are increasing deposit rates against the trend.

Latest GBP Fixed Deposit Trends:

Rate hikes:

• WeLab Bank (WeLab) sharply increased 3-month rate by 0.3% to 3.3%, and also raised the 6-month rate by 0.2% to 3.2%.

Short-term cuts, long-term increases:

• CCB Asia today cut 1-month rate by 0.3% but slightly increased the 6-month and 1-year rates by 0.05% to 3.35%.

Rate cuts:

• Standard Chartered reduced 3-month rate by 0.4% to 2.9%, and cut the 6-month and 1-year rates by 0.3%, now at 2.8% and 2.7% respectively.
• ICBC Asia lowered 3-month and 6-month rates by 0.1%, now both at 3.4%.
• Bank of China Hong Kong cut 3-month, 6-month, and 1-year rates by 0.2%, now at 1.9% for 3 months and 1.95% for 6 months and 1 year.
• CMB (China Merchants Bank) reduced rates for 2 months, 3 months, 6 months, and 9 months by 0.1%, now at 2.3%.

Hang Seng cancels 17% high-yield deposit; digital banks raise rates against the trend

Hong Kong banks have experienced frequent adjustments in fixed deposit rates, with a rare reversal in high-yield rankings. Starting with the 7-day rate, Hang Seng launched a 17% annual rate at the start of the year but expired on February 22, losing its top spot to CCB Asia’s 16.8%.

For 3-month deposits, excluding CCB Asia’s 6.88% (which only applies to the top 25% of deposits for the highest rate), HSBC’s 3.5% is more competitive.

In the half-year category, CCB Asia’s rate was cut, while HSBC’s remained firm at 3.35%, narrowly winning the top spot. About a year ago, HSBC dominated the 3-month, 6-month, and 1-year high-yield charts, but recent aggressive promotions by CCB Asia have reshuffled the rankings. Recently, HSBC’s half-year rate rose again to 3.35%, earning it a “double crown.”

Standard Chartered cuts rates across the board, with the 7-day rate dropping by 1.8% to nearly 12%

High-yield comparison:

7-day rate:

• CCB Asia 16.8%
• Fubon 15.38% (reduced by 5.5% in June last year)
• Hang Seng 15%
• HSBC 14% (branch or phone banking)
• Chiyu 13.88%
• Standard Chartered 12% (cut by 1.8% in March)
• HSBC (liquid wealth management annual rate), China Trust, Nanyang Commercial Bank 13%
• DBS (online account) 11% (reduced by 4% in January), Bank of China Hong Kong 11%
• DBS (branch account) 10% (reduced by 8% in January)
• CCB (China Construction Bank) 2.3%
• ZA Bank 0.01%

Mid- to long-term high-yield leaders:

• 1 month: Fubon 5.38% (down 2.7% in June last year)
• 3 months: HSBC 3.5%, CCB Asia 6.88% (limited to top 25% deposits)
• Half-year: HSBC 3.35%
• 1 year: ICBC Asia + CCB Asia 3.3%

Citibank’s Liao Jiahao forecasts GBP at an average of 1.31 over 3 months

Expert predictions for short, medium, and long-term GBP:

• Citibank’s Liao Jiahao: 3-month forecast at 1.31, 6 to 12 months at 1.23, long-term target 1.3.
• OCBC Hong Kong economist Wang Hao-ting: Political risks in the UK remain high, and tensions in the Middle East continue to pressure the GBP. The Labour Party recently lost a by-election, increasing pressure on Prime Minister Keir Starmer before the May local elections. Market remains cautious about fiscal risks and political uncertainty, which are bearish for GBP. In the next two weeks, GBP/USD is expected to range between 1.42 and 1.45, with a forecast of 1.42 for mid-year and 1.45 by year-end.
• Technical chart levels: Last Monday (March 2), GBP sharply fell to 1.3482, then stabilized around 1.34. Middle East tensions are pushing energy prices higher, likely increasing inflation pressures. Since UK CPI remains well above 2%, the Bank of England may hold off on rate cuts. GBP has been in a downtrend since February, with support around 1.35.

UK at risk of becoming the biggest loser in new tariffs; GBP may be weakest next quarter

Overall analysis suggests GBP is likely to fall short of rising in the short term due to four main reasons:

(1) Political risks: Starting in Q2, GBP could face more negative factors, especially with the May local elections adding political uncertainty. The recent Labour Party defeat in a by-election has weakened Prime Minister Keir Starmer’s popularity.

(2) Tariff concerns: Market fears that the UK could become the biggest loser from “new tariffs,” increasing from 10% to 15%. The British Chambers of Commerce estimates this could raise UK export costs to the US by £3 billion and impact 40,000 UK businesses.

There are reports that UK officials are urgently trying to persuade the US to exempt UK goods from higher tariffs. Education Secretary Bridget Phillipson admitted this change creates uncertainty for UK companies, and the government is engaging at the highest levels to ensure US understands UK’s national interests.

Analysis indicates it’s unclear whether the previously agreed 10% tariff will be implemented unless the US issues clear instructions; otherwise, the final rate could be 15%.

However, before the US attack on Iran at the end of February, US Treasury Secretary Scott Bessent hinted that the new 15% global tariffs could soon take effect.

(3) Dovish Fed: The last UK rate decision on February 5 saw the Bank of England vote 5-4 to keep the policy rate at 3.75%, lowering the 2026 UK growth forecast by 0.3 percentage points to 0.9%. Governor Andrew Bailey admitted there is room for rate cuts this year.

(4) UK-US tensions: With the Middle East conflict entering its 11th day, Trump has repeatedly criticized the UK. Initially, the US refused to use UK bases for Iran operations, and later claimed it was “serious about” deploying two aircraft carriers to the Middle East, which many see as too late. Trump also said the UK was once a great ally, perhaps the greatest among all allies. The UK Ministry of Defence responded that the two carriers are on high alert, ready to deploy quickly, and US military operations in the Middle East are already using UK bases to prevent Iran from launching missiles.

The Bank of England has cut rates six times, totaling 1.5%, but there’s no end in sight

Additionally, the current rate-cut cycle began in August 2024, with the BoE reducing rates six times, totaling 1.5%. Last year, the Bank adjusted rates sporadically—initially holding steady at the end of 2022, then cutting 0.25% in February 2023, but maintaining rates in March. In May, rates were cut again by 0.25%, June saw no change, August cut by 0.25%, September and November held steady, and December cut by 0.25%, bringing the rate down to 3.75%, below the 4% target.

Finally, global oil prices remain closely watched. Bank of America warns that rising oil prices may prevent the Fed from turning hawkish. If oil shocks persist and US economic conditions worsen, the Fed may adopt a more dovish stance.

There are also reports that the International Energy Agency (IEA) has recommended releasing the largest-ever oil reserves, and G7 energy ministers (Canada, France, Germany, Italy, Japan, UK, US) discussed releasing strategic reserves yesterday. The US considers a joint release of 300-400 million barrels, but no decision has been announced yet.

Bank of America warns that soaring oil prices could force the Fed to pivot and cut rates

Currently, global daily oil demand is about 100 million barrels. If the Strait of Hormuz accounts for 20% of global exports, the amount of reserves to be released would be relatively small.

To address oil shortages elsewhere, the US has temporarily exempted India from sanctions on Russian oil imports. However, India’s largest bank, SBI, is uncertain how long these exemptions will last and is reluctant to process related payments to avoid business and reputational risks.