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Odds still favour a mild recession

We still think a mild recession over the coming quarters is more likely than not. As the economy weakens and the downward trend in core inflation gathers pace, we think interest rates will eventually be cut more quickly than markets are pricing in. We expect GDP growth to slow from 1.3% this year to only 0.4% in 2024, before looser monetary policy drives a recovery to 2.0% in 2025.

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