KPMG comments on today’s GDP figures

“It is too early to call a recession despite output fall” says Yael Selfin, Chief Economist at KPMG UK.

“It is too early to call a recession despite output fall” says Yael Selfin.

“Temporary factors such as an extra bank holiday and the phasing out of the Test & Trace scheme were behind the fall in GDP in Q2. While we see increasing signs of underlying weakness in the economy, we expect a more severe downturn to take place only from towards the end of this year.

“Households are already bruised by rising inflation, which is putting a squeeze on real incomes, while rising interest rates are making servicing mortgages less affordable. The expected rise in Ofgem’s utility tariff cap this autumn could be the final straw before the UK enters a consumer-driven downturn.

“We expect a slightly shorter and milder recession than the Bank of England pencilled in last week. The main difference stems from our view that energy prices will eventually subside, contributing less to inflation, while the Bank’s forecast means that prices stay elevated over the next three years.”


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About KPMG

KPMG LLP, a UK limited liability partnership, operates from 22 offices across the UK with approximately 15,300 partners and staff.  The UK firm recorded a revenue of £2.43 billion in the year ended 30 September 2021.

KPMG is a global organisation of independent professional services firms providing Audit, Legal, Tax and Advisory services. It operates in 145 countries and territories with more than 236,000 partners and employees working in member firms around the world. Each KPMG firm is a legally distinct and separate entity and describes itself as such. KPMG International Limited is a private English company limited by guarantee. KPMG International Limited and its related entities do not provide services to clients.

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