Barclays forecasts the U.S. Federal Reserve delivering a 25-basis-point hike in December, compared to a prior rate hike expectation in November.

U.S. economic activity was little changed over the last month and a half, as labor market tightness continued to ease and prices continued to rise at a modest pace, according to a Federal Reserve report published on Wednesday.

"We continue to think, however, there is a strong case for at least another rate hike, assuming that longer-term yields do not continue to rise sharply," Barclays economists said in a note dated Oct. 18.

(Reporting by Reshma Rockie George in Bengaluru; Editing by Janane Venkatraman)