Commenting on today’s preliminary GDP estimates for Q3, Yael Selfin, Chief Economist at KPMG in the UK said:
“Preliminary Q3 GDP figures show that the UK economic growth notched up marginally to 0.4% during the past quarter, thanks to a pick-up in business services and finance as well as in manufacturing output. Nevertheless, the latest GDP figures confirm that the UK economy has lost its spark, with lacklustre performance becoming the new norm. There has been a deterioration in economic performance since the start of the year, as inflation has begun to bite and consumers have started to reconsider their priorities. This trend is likely to remain for a while, with Brexit related uncertainties looming large for consumers and businesses. Our expectations are therefore for annual GDP growth to fall short of the UK’s potential and reach only around 1.5% in the short term.
“The weaker GDP growth the UK economy is currently experiencing, together with more realistic projections of future productivity performance by the OBR, are likely to make it hard for the Chancellor to provide any meaningful giveaways in his Budget next month. While continued muted growth should allow the Bank of England a final pause next week before it embarks on a new course of gradual interest rate rises by February or May next year.”
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KPMG LLP, a UK limited liability partnership, operates from 22 offices across the UK with approximately 13,500 partners and staff. The UK firm recorded a revenue of £2.07 billion in the year ended 30 September 2016. KPMG is a global network of professional firms providing Audit, Tax, and Advisory services. It operates in 152 countries and has 189,000 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. Each KPMG firm is a legally distinct and separate entity and describes itself as such.