Deutsche Bank forecasts UK GDP at 1% in 2026-27, exceeding Bank of England Scenario A, while CPI may dip below 2% target.
UK economic growth is tracking above the Bank of England’s Scenario A projections, with GDP expected to reach around 1% in 2026-27. Stronger-than-anticipated Q1 2026 growth and a resilient output push quarterly expansion toward 0.1-0.2% q-o-q in Q2 2026.
Annual GDP growth for this year is projected at 0.9%, aligning with BoE staff estimates, but could rise to 1% under current market conditions. Inflation, however, is seen slightly below Scenario A, potentially falling under the 2% target in the longer term.
The labor market has softened marginally, contributing to easing price pressures, though growth remains more robust than the BoE initially assumed.