KPMG comments on today’s GDP data

“New year but old problems for the UK economy” says Yael Selfin, Chief Economist at KPMG UK.

“The economic outlook currently remains gloomy, with a technical recession still potentially on the cards in the second half of 2023, especially given the expected impact from the industrial action in December. Nonetheless, even if the economy manages to avoid a recession, it is expected to remain in stagnation territory.

“Manufacturing recovered somewhat after it was hit by the impact of high interest rates and weakening global economic activity, while construction is experiencing difficulties from a slowdown in housebuilding. The hope is that the outlook ahead will brighten as mortgage rates continue to fall, improving affordability dynamics.    

“The second half of the year could see fortunes changing for the UK economy, with inflation expected to continue to normalise. This could raise the prospect of earlier interest rate cuts, with the Bank of England likely to be wary about the risk of overtightening given the weak economic backdrop.”

-Ends-  

For media enquiries, please contact:

Gill Carson, Corporate Communications

Mob: +44 (0)7768 635843

Email:   gill.carson@kpmg.co.uk

KPMG Press Office

Tel:  +44 (0) 207 694 8773

Follow us on twitter: @kpmguk

Notes to Editors:  

About KPMG UK

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.