• People demonstrate in central London against the rising cost of living. EPA
    People demonstrate in central London against the rising cost of living. EPA
  • Former British prime minister Boris Johnson said workers should accept a pay cut to avoid spiralling inflation. AFP
    Former British prime minister Boris Johnson said workers should accept a pay cut to avoid spiralling inflation. AFP
  • Inflation in the UK hit an annual rate of 9.1 per cent in May. EPA
    Inflation in the UK hit an annual rate of 9.1 per cent in May. EPA
  • The British government told workers they cannot expect pay rises to keep up with the increasing cost of living. EPA
    The British government told workers they cannot expect pay rises to keep up with the increasing cost of living. EPA
  • The Bank of England, which says it can do nothing to stop the sharp increase in prices, is raising rates at an unprecedented rate. AFP
    The Bank of England, which says it can do nothing to stop the sharp increase in prices, is raising rates at an unprecedented rate. AFP
  • The UK was also brought to standstill by the biggest rail strike in 30 years this week, with 40,000 RMT union members walking out in a row over a below-inflation pay offer. PA
    The UK was also brought to standstill by the biggest rail strike in 30 years this week, with 40,000 RMT union members walking out in a row over a below-inflation pay offer. PA
  • The RMT picket line outside Bristol Temple Meads station. PA
    The RMT picket line outside Bristol Temple Meads station. PA
  • The cost of petrol continues to rise. AFP
    The cost of petrol continues to rise. AFP
  • A protester demonstrates outside Downing Street. EPA
    A protester demonstrates outside Downing Street. EPA
  • Volunteers in Bradford, northern England, prepare food parcels at the Bradford Central Foodbank. More and more people are visiting the centre. AFP
    Volunteers in Bradford, northern England, prepare food parcels at the Bradford Central Foodbank. More and more people are visiting the centre. AFP

UK economy to be in recession for all of 2023, KPMG says


Matthew Davies
  • English
  • Arabic

The UK economy is in recession and will remain so for the whole of 2023, financial services firm KPMG predicted on Monday.

According to its latest forecasts, the UK economy will shrink by 1.3 per cent next year, as high inflation and rising interest rates slow the pace of growth.

KPMG predicted the UK is already in what will be a shallow yet prolonged recession, following official figures from the Office for National Statistics (ONS) that showed the economy shrank by 0.2 per cent in the third quarter, between July and September.

The technical definition of a recession is two consecutive quarters of negative growth.

KPMG also forecast that output could also fall by 1.9 per cent next year as falling consumer spending and higher borrowing costs weigh on businesses.

Last week, the Bank of England increased interest rates to a 14-year high of 3.5 per cent. They are expected to reach at least 4 per cent by next spring.

Britain's rate of unemployment edged higher in the three months to September as the country heads for what is feared will be the longest recession in a century, official figures show. PA
Britain's rate of unemployment edged higher in the three months to September as the country heads for what is feared will be the longest recession in a century, official figures show. PA

On the prospects for the labour market, KPMG said a deteriorating picture will start to emerge in the first half of 2023, with the unemployment rate reaching 5.6 per cent by mid-2024, representing an increase of about 680,000 people.

“The increase in energy and food prices during 2022, as well as higher overall inflation, have significantly reduced households’ purchasing power,” said Yael Selfin, chief economist at KPMG UK.

“Rising interest rates have added another headwind to growth. Lower income households are particularly exposed to the mix of current price pressures, as the most affected spending categories largely fall on necessities, with few substitutes in the short run.

“Households are expected to rein in spending on discretionary items in 2023 in response to the squeeze on income. As consumers cut back on spending, we anticipate a sharp reduction in non-essential categories of spend by those households most affected by the rise in energy and food costs, including spending on eating out and entertainment.” she said.

Game Changer

Director: Shankar 

Stars: Ram Charan, Kiara Advani, Anjali, S J Suryah, Jayaram

Rating: 2/5

Profile

Company: Libra Project

Based: Masdar City, ADGM, London and Delaware

Launch year: 2017

Size: A team of 12 with six employed full-time

Sector: Renewable energy

Funding: $500,000 in Series A funding from family and friends in 2018. A Series B round looking to raise $1.5m is now live.

Who's who in Yemen conflict

Houthis: Iran-backed rebels who occupy Sanaa and run unrecognised government

Yemeni government: Exiled government in Aden led by eight-member Presidential Leadership Council

Southern Transitional Council: Faction in Yemeni government that seeks autonomy for the south

Habrish 'rebels': Tribal-backed forces feuding with STC over control of oil in government territory

Keep it fun and engaging

Stuart Ritchie, director of wealth advice at AES International, says children cannot learn something overnight, so it helps to have a fun routine that keeps them engaged and interested.

“I explain to my daughter that the money I draw from an ATM or the money on my bank card doesn’t just magically appear – it’s money I have earned from my job. I show her how this works by giving her little chores around the house so she can earn pocket money,” says Mr Ritchie.

His daughter is allowed to spend half of her pocket money, while the other half goes into a bank account. When this money hits a certain milestone, Mr Ritchie rewards his daughter with a small lump sum.

He also recommends books that teach the importance of money management for children, such as The Squirrel Manifesto by Ric Edelman and Jean Edelman.

The Sand Castle

Director: Matty Brown

Stars: Nadine Labaki, Ziad Bakri, Zain Al Rafeea, Riman Al Rafeea

Rating: 2.5/5

White hydrogen: Naturally occurring hydrogenChromite: Hard, metallic mineral containing iron oxide and chromium oxideUltramafic rocks: Dark-coloured rocks rich in magnesium or iron with very low silica contentOphiolite: A section of the earth’s crust, which is oceanic in nature that has since been uplifted and exposed on landOlivine: A commonly occurring magnesium iron silicate mineral that derives its name for its olive-green yellow-green colour

Fight card

1. Bantamweight: Victor Nunes (BRA) v Siyovush Gulmamadov (TJK)

2. Featherweight: Hussein Salim (IRQ) v Shakhriyor Juraev (UZB)

3. Catchweight 80kg: Rashed Dawood (UAE) v Khamza Yamadaev (RUS)

4. Lightweight: Ho Taek-oh (KOR) v Ronald Girones (CUB)

5. Lightweight: Arthur Zaynukov (RUS) v Damien Lapilus (FRA)

6. Bantamweight: Vinicius de Oliveira (BRA) v Furkatbek Yokubov (RUS)

7. Featherweight: Movlid Khaybulaev (RUS) v Zaka Fatullazade (AZE)

8. Flyweight: Shannon Ross (TUR) v Donovon Freelow (USA)

9. Lightweight: Mohammad Yahya (UAE) v Dan Collins (GBR)

10. Catchweight 73kg: Islam Mamedov (RUS) v Martun Mezhulmyan (ARM)

11. Bantamweight World title: Jaures Dea (CAM) v Xavier Alaoui (MAR)

12. Flyweight World title: Manon Fiorot (FRA) v Gabriela Campo (ARG)

COMPANY PROFILE
Name: Akeed

Based: Muscat

Launch year: 2018

Number of employees: 40

Sector: Online food delivery

Funding: Raised $3.2m since inception 

Updated: December 19, 2022, 9:19 AM