Potential US recession, Eurozone gas supply issues, and UK income squeeze could lead to downturn

  • UK economy at risk of mild recession due to cost of living crisis
  • KPMG’s main scenario predicts GDP growth of 3.2% in 2022 and 0.7% in 2023
  • Downturn could arise from US recession, Eurozone gas supply issues, and UK household income squeeze
  • Recession in the scenario would involve a 1.5% fall in GDP between Q3 2022 and Q3 2023
  • UK economy to contract by 1.1% in 2023 after 3% growth in 2022
  • Consumer spending expected to decline by 1.9% in 2023
  • Labour market may cool off as businesses adjust hiring needs amid weaker activity

KPMG’s latest report warns that the UK economy is at risk of a mild recession due to the cost of living crisis. The main scenario predicts GDP growth of 3.2% in 2022 and 0.7% in 2023, but a weaker scenario involving a US recession, Eurozone gas supply issues, and worsening UK household income squeeze could lead to a 1.5% fall in GDP between Q3 2022 and Q3 2023. The UK economy is expected to contract by 1.1% in 2023 after 3% growth this year, with consumer spending falling by 1.9%. The report also suggests the labour market may cool off as businesses adjust hiring needs amid weaker activity.

Factuality Level: 8
Factuality Justification: The article provides an accurate summary of KPMG’s economic report on the potential risks to the UK economy, including various scenarios and their impacts on GDP growth, as well as insights into the labor market. It presents a balanced view without any clear signs of sensationalism or opinion masquerading as fact.
Noise Level: 5
Noise Justification: The article provides relevant information about the potential risks to the UK economy and offers a detailed analysis of different scenarios based on various factors such as interest rates, global events, and household consumption. It also includes data from KPMG’s report and survey results. However, it could benefit from more in-depth exploration of the consequences for specific industries or demographics and potential policy solutions to mitigate these risks.
Financial Relevance: Yes
Financial Markets Impacted: UK economy, interest rates, GDP growth, consumer spending, labour market
Financial Rating Justification: The article discusses the potential for a mild recession in the UK economy and its impact on various financial indicators such as GDP growth, consumer spending, and the labor market. It also mentions interest rates and their effect on firms and households.
Presence Of Extreme Event: No
Nature Of Extreme Event: No
Impact Rating Of The Extreme Event: No
Extreme Rating Justification: There is no extreme event mentioned in the article.

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