KPMG comments on today’s GDP data

“Sluggish growth ahead for UK economy as interest rates continue to rise” says Yael Selfin, Chief Economist at KPMG UK:

“Sluggish growth ahead for UK economy as interest rates continue to rise” says Yael Selfin

“As the Bank of England accelerates its interest rate increases to combat inflation, households and businesses are beginning to feel the effects of tighter monetary policy, with more yet to come.

“Business investment is likely to weaken further in the near term, as borrowing costs increase and policy uncertainty remains high ahead of the elections.

“Overall consumption growth could remain sluggish until well into next year as households face multiple economic headwinds. While stronger pay growth and falling inflation could see real incomes start growing again later this year, the impact of higher mortgage costs and rising rents could weigh on household spending. Falling house prices may further dent spending.

“The UK economy contracted by 0.1 per cent in May. The three Bank holidays in the month had an uneven impact across sectors, with services seeing no change in output on the previous month, while manufacturing and construction were both negatively impacted.”



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About KPMG

KPMG LLP, a UK limited liability partnership, operates from 20 offices across the UK with approximately 17,000 partners and staff. The UK firm recorded a revenue of £2.72 billion in the year ended 30 September 2022. 

KPMG is a global organisation of independent professional services firms providing Audit, Legal, Tax and Advisory services. It operates in 143 countries and territories with more than 265,000 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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