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Investing.com -- Deutsche Bank (ETR:DBKGn) on Tuesday projected a slight rebound in the UK's Gross Domestic Product (GDP) for February, following a 0.1% month-on-month contraction in January.
The bank's forecast anticipates a 0.1% month-on-month rise in output for February.
The expected rebound is largely due to the services sector, which Deutsche Bank predicts will experience a minor increase relative to January. The bank also forecasts growth in the manufacturing sector by 0.4% month-on-month, and an increase in construction output by 0.1% month-on-month.
Despite these projections, Deutsche Bank acknowledges that there are more risks skewed to the downside. For the first quarter of 2025, the bank expects the UK GDP to expand by 0.3% quarter-on-quarter, aligning with the Monetary Policy Committee's modal projection of 0.25% quarter-on-quarter.
However, it also warns of increasing downside risks to its growth forecasts, particularly due to the Trump tariffs. These tariffs could potentially cause a 0.3 to 0.6 percentage point hit to the GDP, a factor that Deutsche Bank will address in a revised growth update later in the week. This does not take into account non-linearities and trade uncertainty.