In response to the Bank of England’s August Inflation Report, which pointed to continued above target inflation but weaker growth, Andrew Smith, Chief Economist at KPMG in the UK said: “This is the third quarterly downgrade to the GDP outlook in a row. Forecasts for growth in both 2011 and 2012 are nearly 1% below those made only a year ago – implying the level of output at the end of next year will be 2% down from those earlier projections. This is a significant shortfall. Thus it is unsurprising that the MPC is prepared to live with high inflation for the time being and expects a return to target within the next two years. If growth keeps disappointing, what can the Committee do? A further round of quantitative easing must be moving up the agenda.”
- ENDS -
For further information please contact:
KPMG Corporate Communications
T: 0207 694 4246
M: 07920 274856
KPMG Press Office: 020 7694 8773
KPMG LLP, a UK limited liability partnership, is a subsidiary of KPMG Europe LLP and operates from 22 offices across the UK with nearly 11,000 partners and staff. The UK firm recorded a turnover of £1.6 billion in the year ended September 2010. KPMG is a global network of professional firms providing Audit, Tax, and Advisory services. We operate in 150 countries and have more than 138,000 professionals working in member firms around the world. The independent member firms of the KPMG network are affiliated with KPMG International Cooperative ("KPMG International"), a Swiss entity. KPMG International provides no client services.
This article represents the views of the author only, and does not necessarily represent the views or professional advice of KPMG in the UK.