Private banks to suffer as latest Q2 GDP 'completely inaccurate'?

Private banks may find business not as swift in the first half of 2011, as one wealth management expert claims the latest data for gross domestic product (GDP) between April and June this year "completely overstates the strength of the economy".

Howard Archer, chief European and UK economist at forecasting company IHS Global Insight, claims the figures - which were revised upwards from 1.1 per cent - reflect a "one-off spike up in growth" that will not be seen again for some time.

This may mean private banks see trade falling in the near future, as demand for high-end services such as investment portfolio management trails off.

Mr Archer notes while double-dip recession is not the group's "central forecast", he believes growth will hover around 1.5 per cent next year, lower than the majority view, which puts it at around two per cent.

Office for National Statistics figures show GDP for the second quarter of the year was 1.7 per cent higher than the same period in 2009.  ADNFCR-2318-ID-800099093-ADNFCR