HSBC out with latest note on UK. Our good friends at Livesquawk reporting.
- 2017 +1.9% from +1.2%
- 2018 +1.4% from +1.3%
- still see a slowdown this year led by weaker real incomes and consumption growth
- cyclical global upswing is supporting exports and the stronger footing for Q4 2016 will lift full-year growth
Say HSBC:
We are raising our 2017 and 2018 GDP growth forecasts for the UK, following the upward revision of Q4 GDP growth, from an already strong 0.6% to 0.7% q-o-q. We now see full-year growth of 1.9% (up from 1.2%) for this year, and 1.4% for 2018 (from 1.3%). We have not changed our view that growth will slow meaningfully in sequential terms this year. But the UK clearly entered 2017 on a stronger footing than we expected in our last forecasting round. And, for now, the global cyclical upswing seems to be mitigating the downside risks.
Bank of England still on hold We have not changed our forecasts for the currency, inflation or real wages: we still think inflation will push higher in the near term, but fall back quite sharply next year. We also retain our view that the Bank of England will not raise rates this year or next, as inflation remains exchange-rate driven (and not demand-driven) and the political and growth climates remain uncertain.
GBPUSF nudging up to 1.2541 as EURGBP stalls around 0.8450 again
