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UK productivity must improve to boost economy

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KPMG UK’s latest quarterly Economic Outlook Report highlights the limited spare capacity available for the economy and the need to improve productivity to lift growth prospects in the UK.

Table 1: KPMG main scenario for the UK economy 

  2017 2018 2019 2020
GDP 1.7 1.3 1.6 1.5
Consumer spending 1.9 1.6 1.3 1.2
Investment 3.3 0.3 1.6 1.7
Unemployment rate 4.4 4.1 4.0 4.0
Inflation 2.7 2.5 2.2 2.1
Base interest rate 0.50 0.75 1.00 1.25

 

Yael Selfin, Chief Economist, KPMG UK, commented on the analysis: “Looking ahead to 2019, we are bracing ourselves for one of the most eventful years in Britain’s recent history. However, while Brexit is likely to dominate a large part of next year’s agenda, it is important that we don’t let it cloud our vision to other opportunities and risks around us. While tightening credit conditions globally and continued geopolitical tensions are also sure to produce some hairy moments in 2019, capitalising on new markets and products would help the UK economy to grow.

“The UK’s economic challenges go beyond Brexit, and more focus should be turned towards improving productivity and social inclusion as finding solutions for these two problems will go a long way to improving the UK’s long term prospects.”




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