BofA Downgrades UK Growth Forecast Amid Energy Price Shock

Bank of America Securities has downgraded its growth forecast for the UK to 1.2% in 2027, citing higher energy prices and uncertainty ahead of the Autumn Budget.

The economists Sonali Punhani and Ruben Segura-Cayuela raised their 2026 growth forecast by 10 basis points to 1.2%, but lowered their 2027 forecast from 1.3% to 1.2%. They kept the 2028 forecast unchanged at 1.5%.

The energy price shock is expected to slow down growth in the coming months, with the Bank of England holding its interest rate call steady for now but warning that a single 25-basis-point cut may be necessary in November 2027.