JP Morgan lifts UK’s 2023 economic growth forecast

(Reuters) – J.P.Morgan on Friday raised its forecast for the UK’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% in 2023, up from 0.5% expected earlier. Data on Friday showed growth of 0.2% 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.

(Reporting by Aniruddha Ghosh in Bengaluru; Editing by Devika Syamnath)