(Bloomberg Opinion) — JPMorgan Chase & Co. is the first to predict that Britain will not recession in 2023, after a series of signs of more resilient growth in recent weeks.
The US bank sharply raised its forecast for UK growth after consumer confidence rebounded and surprisingly returned to growth territory in the latest PMI. While the National Institute of Economic and Social Research also doesn’t expect a recession, JPMorgan is the only one among banks with such a central outlook, according to a Bloomberg survey.
The British economy was expected to lag behind the US and the Eurozone in 2023. But there is a more positive tone to the outlook as political turmoil subsides and lower natural gas prices ease pressure on homes and businesses.
“This week’s strong PMI report and strong rise in consumer confidence challenge the Bank of England’s view that a recession is looming, accompanied by a rise in the unemployment rate,” Alan Monks, economist at JPMorgan, said in a note.
JPMorgan predicted a tech recession in the first half of 2023, forecasting a 0.3% drop in GDP in the first quarter and a 0.2% drop in the second quarter year over year. It now expects growth of 0.5% and 0.6%, respectively.
Earlier this month, Near said that one in four households in the UK would not be able to pay energy and food bills, but that the economy would narrowly escape recession in 2023. Last week, Citigroup said that UK inflation It will drop to 2 in the BoE. target percentage this year, much sooner than most forecasters expect.
Original note: JPMorgan became the first bank to predict that the UK would avoid a recession
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