The stronger-than-expected 0.4% m/m rise in GDP in January, along with an upward revision to the December outturn, shows the economy still had solid momentum at the start of this year. The weak February preliminary estimate, showing that GDP was unchanged, cannot be blamed entirely on US tariff threats, with the unseasonably harsh winter weather likely playing some role too. Nonetheless, it adds to the sense the economy is losing momentum. With business confidence lower than during the pandemic and consumer confidence also pre-emptively slumping due to US tariff threats, we expect a mild recession this year.
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