UK Economy's Strong Growth Story May Fizzle Out This Autumn, Warns Deutsche Bank

The UK's economy has been growing strongly, driven by sectors like information and communications technology, which have seen an annualized growth rate of almost 9% in the first half of the year.

This is largely due to AI-related spending, according to Deutsche Bank's chief U.K. economist Sanjay Raja, who notes that productivity has also 'finally turned a corner.'

However, Raja warns that momentum may slow down in the second half of the year as one-off boosts from a hot summer and the World Cup fade.

Rising energy prices are expected to squeeze real disposable incomes as household dual-fuel bills climb starting in the third quarter. Seasonal drags will also weigh on growth, which is unlikely to sustain its roughly 2% annualized pace into the second half.