Outlook for UK banking sector improves

<p>Moody’s has improved its outlook for the UK’s banking sector.</p>

There are more positive signs for the UK's economic recovery today (July 10th) after Moody's improved its outlook for the country's banking sector.

It changed its view of the sector from stable from negative, providing another boost for the economy, which expanded by 0.3 per cent in the first three months of the year.

Analysts are now predicting there will be further growth in the second quarter of 2013, with the International Monetary Fund having improved its forecast from 0.7 per cent to 0.9 per cent.

"Unemployment has not increased as much as in previous recessions, thereby contributing to a stabilisation in banks' asset quality," the statement from Moody's said.

UK banks are described by the ratings agency as having been "sufficiently well capitalised to absorb expected losses from both our central and adverse stress scenarios".

The UK's services sector has also been growing in recent weeks, indicating the pace of the recovery could be set to step up a gear in the coming months.

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