J.P.Morgan on Friday raised its forecast for the United Kingdom’s annual economic growth after official data showed a surprise increase for the second quarter and bolstered bets of more interest rate hikes.
The brokerage now sees the economy growing 0.6 percent in 2023, up from 0.5 percent expected earlier. Data on Friday showed growth of 0.2 percent in the second quarter, against the consensus for a flat reading in a Reuters poll of economists.
JPM’s UK economist Allan Monks said the surprise in gross domestic product (GDP) figures cannot be dismissed as a bank holiday effect because final demand came in strong for the second quarter as a whole and real household incomes are set to improve in the latter half of the year.
The Wall Street bank still expects the country to face a mild recession in the second half of 2024.