HSBC is now expecting the UK economy to grow next year, as it lifted forecasts on signs of resilience.
The banking giant released central forecasts alongside its third quarter results, showing that UK GDP is now expected to grow 0.4pc next year. At its interim results, it had suggested the economy would shrink 0.6pc next year.
It also said the UK housing market was likely to perform better next year than it previously expected, with house prices to fall around 4.7pc. At its interim results, the figures had shown an expected decline of 5.7pc.
HSBC compiles the central forecasts through using consensus forecasts, market data and distributional estimates.
It said that GDP growth forecasts had improved “for most of our major markets during the third quarter, following better-than-expected growth in the first half of 2023”.
“In North America and Europe, economic growth has proved more resilient to higher inflation and interest rates than was previously expected. Consumption spending in particular has continued to grow despite the squeeze on real disposable income, while employment demand has also remained strong.”
It came after HSBC revealed a $4.5bn (£3.7bn) rise in its profits in the latest three-month period, thanks to a boost from higher interest rates.
The company said pre-tax profits hit $7.7bn in the third quarter of the year, compared to $3.2bn the same period a year earlier. It unveiled plans for a $3bn share buyback.
HSBC posted a net interest margin of 1.7pc, up by 19 basis points compared with last year. The net interest margin is the difference between average lending and deposit rates.
Chief executive Noel Quinn said: “We have had three consecutive quarters of strong financial performance.”
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Robert Johnson is a UK-based business writer specializing in finance and entrepreneurship. With an eye for market trends and a keen interest in the corporate world, he offers readers valuable insights into business developments.
