Bank of America CorporationDowngrade the UK's growth forecast, saying the rebound curve is unlikely to look like a "V".
Robert Wood, the chief UK economist, lowered his forecast for GDP growth in 2021 to 6.9 per cent, down from a previous forecast of 7.3 per cent. Official figures released earlier showed that GDP growth in the second quarter was lower than the Bank of England forecast, reflecting the impact of labour and material shortages.
"GDP growth peaked in March and has almost been slowing since then," Wood wrote in a report on Thursday. "most of the benefits of economic unsealing are over, and policy will soon change from a tailwind to a headwind."
Wood said the Bank of England's expectation that inflation would rise to 4 per cent was double its target, leading the market to predict a possible rate hike in the first half of 2022. However, with the end of the government's job protection scheme, unemployment is expected to rise, which may delay the pace of interest rate hikes.
"if economic growth andWith inflation lower than the Bank of England's forecast and unemployment higher than expected, we doubt that policy makers will raise interest rates' earlier', "Wood said. If inflation rises sharply this winter, his own forecast of an interest rate hike in May 2022 could face more uncertainty.