Synopsis:

Morgan Stanley expects UK GDP to contract by 0.1% MoM in January, following a strong December rebound that came after a series of weak months. Despite this pullback, the bank tracks 0.2% QoQ growth for Q1 2025, suggesting modest economic momentum remains intact.

Key Points:

1️⃣ December GDP Was Strong But Followed a Weak Trend 📊

• December saw a solid rebound, but prior months were disappointing.
• Some correction in January is likely.

2️⃣ January GDP Expected to Decline by 0.1% MoM 📉

• A mild contraction expected after December’s strength.

3️⃣ Q1 2025 Growth on Track for 0.2% QoQ 🔄

• Despite the January dip, the economy is still expected to expand modestly in Q1.

Conclusion:

Morgan Stanley sees a slight January GDP decline (-0.1% MoM) as part of a correction after December’s strength. However, overall Q1 2025 growth remains positive, with 0.2% QoQ expansion expected.