Following a technical recession in the second half of 2023, the UK economy has shown tentative signs of renewed momentum, with growth of 0.5% expected this year, and 0.9% in 2025, according to the latest KPMG Global Economic Outlook. The report finds a number of reasons for optimism. Consumption has been supported by the cuts to National Insurance Contributions, which are expected to boost real household disposable income by 1%. Against this backdrop, consumer confidence is gradually recovering, consistent with continued tightness in the labour market and further falls in inflation. Further improvements in underlying inflationary pressures will favour a gradual withdrawal of monetary policy restrictiveness in the coming months, and Bank Rate is forecast to fall towards 3% by the second half of 2025. Click here for more.
