According to KPMG. a strong lift-off for the UK economy is expected this summer


According to KPMG’s most recent analysis of the UK Economic Outlook, a combination of the lifting of restrictions, consumer demand, excessive saving and a range of government incentives is expected to trigger a “strong rebound” for the UK economy this summer.

That boost will reportedly result in 6.6% GDP growth, up from 4.6% in March 2021 and 5.4% in 2022, allowing the economy to hit pre-Covid levels by the first quarter of next year can.

Meanwhile, rising cost pressures and the withdrawal of temporary tax cuts will increase inflation this year, according to KPMG, but the analysis showed that it should “moderate” in the second half of next year, averaging 1.7% in 2021 and 2, 1% in the year is 2022.

With capacity remaining, the company expects the Bank of England to keep rates unchanged in the short term to allow the economy to “fully recover and mitigate the downside risks” to the outlook.

Since the beginning of the pandemic, companies have been partially protected from bankruptcy both by the direct financial support offered and by temporary measures to suspend and relax bankruptcy proceedings.

After the expiry of the temporary regulation, however, the company warned that the number of corporate bankruptcies could “increase significantly” despite short-term low interest rates. That could mean a high of around 8,000 bankruptcies around the turn of the year before the numbers drop back to the estimated average of 4,000 per quarter.

Yael Selfin, Chief Economist at KPMG UK, said: “As restrictions are lifted and consumers flock again, we expect a robust recovery. Some sectors, like manufacturing and construction, have made up most of the land lost last year, while others, like hospitality, are now in the big times.

“But the possible emergence of new variants of the virus that are less responsive to the current vaccines is still a downside risk, albeit less severe than before, as the economy has adapted to operate under social distancing restrictions.”

She added, “An expected surge in bankruptcies as government subsidies withdraw could also have an impact on the recovery.”


About Nina Snider

Check Also

In the “miracle city” of Shenzhen, people fear for China’s economic future

By David Kirton SHENZHEN, China (Reuters) – David Fong arrived in southern boomtown Shenzhen in …

Leave a Reply

Your email address will not be published.