KPMG comments on today’s GDP data
“UK economy settles into a prolonged recession” says Yael Selfin, Chief Economist at KPMG UK.
“UK economy settles into a prolonged recession” says Yael Selfin, Chief Economist at KPMG
“The sharp rise in energy and other consumer prices has contributed to a squeeze on household finances, which is expected to have pushed the UK economy into a recession from the third quarter of this year. The current downturn is likely to last until the end of 2023, during which GDP is expected to shrink by 1.6%.
“Interest rate rises and the prospect of the Bank of England raising them even further could exacerbate the stalemate in the UK housing market, causing more pronounced cutbacks in spending. In addition, a turn to a more austere fiscal policy expected from next week’s Autumn Statement could contribute to prolonging any downturn.
“UK GDP fell by 0.2% in the third quarter, driven largely by falls in consumer spending, leaving the economy 0.4% smaller than prior to the pandemic.”
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