HSBC Cuts UK 2027 GDP Growth Forecast to 1.1% Ahead of Budget

HSBC lowered its UK economic growth forecast for 2027 to 1.1% on Tuesday, warning that higher inflation and interest rates will weigh on consumer spending and the housing market. The downgrade came a day before John Healey's first Budget. The revised estimate is down from 1.4% at the start of the year and below the 1.2% projected in August. HSBC also raised its unemployment forecast to 5.2% from 4.7% under its central scenario, saying "the outlook has deteriorated." The bank separately reported a 32% rise in pre-tax profit to $9.6 billion for the three months to Sept. 30, missing City expectations and sending shares down as much as 7%. Revenue rose 5% to $18.6 billion. Speculation that the Chancellor will raise the corporation tax surcharge on banks from 3% to 8% has drawn union support for a bank tax raid.