Deutsche Bank’s Sanjay Raja expects UK GDP to rebound by 0.2% m-o-m in February after a flat January, with balanced risks around the nowcast. The bank’s models also point to a possible upward revision to January. However, Deutsche Bank projects Q2-26 GDP growth slowing to 0.2% q-o-q and sees 2026 GDP at just 0.7%, with downside risks.
Nowcast signals modest early-2026 recovery
“The January GDP report disappointed – plain and simple. With the economy stagnating to start the year, we expect a rebound in February. We don’t discount an upward revision to January GDP either.”
“Our nowcast models point to both a potential upward revision to January and some further upward momentum in February.”
“What do we see for February GDP? We see GDP expanding by 0.2% m-o-m, lifted by broad-based momentum across the services, production and construction sectors. We think risks around our nowcasts are balanced.”
“Looking ahead, we expect growth to temper. Indeed, higher uncertainty would dampen spending and investment. Tighter financial conditions won’t help either.”
“We see Q2-26 GDP growth slowing to 0.2% q-o-q (from 0.3% q-o-q in Q1-26). We see 2026 GDP at 0.7%.”
(This article was created with the help of an Artificial Intelligence tool and reviewed by an editor.)
Source: https://www.fxstreet.com/news/uk-february-rebound-but-2026-outlook-soft-deutsche-bank-202604091157
