Following publication of the UK GDP Preliminary figures, Malcolm Edge, UK head of markets at KPMG, is concerned that while investment from business is urgently needed to provide the stimulus for growth, more needs to be done before corporates will release funds. He said:
“Turmoil in the eurozone, together with the ongoing deficit discussions in the US, are exacerbating the pressures on UK corporates. With so much economic uncertainty, businesses are hovering at an amber light and are likely to keep their foot on the brakes rather than take investment decisions which could compromise their returns.
“As the Prime Minister said yesterday regarding the UK, the right strategy for the country is to get on top of our debt and deficit and also create an environment which makes the UK a better place for business to grow and expand. This has to be correct. But while the UK government has launched a number of welcome initiatives aimed at getting business to move onto their growth agenda, the reality is that there is simply too much uncertainty and not enough confidence to see significant levels of investment being made by corporates.
“There has been a lot of talk about the Chancellor moving to Plan B, such as fiscal stimulus in the form of tax reductions or more quantitative easing. The reality is however, that as with most countries we simply cannot afford this. However, the Chancellor must consider, and quickly, Plan A+, that is a package of further tangible and meaningful measures to stimulate economic growth such as a short term enhancement of capital allowances on spend and handing more power to the Local Enterprise Partnerships quickly to aid the localism agenda.”
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For further information please contact:
Julie Marshall, Senior Corporate Communications Manager – Midlands
Tel: 0121 232 3177
Mobile: 07887 633677
KPMG LLP, a UK limited liability partnership, is a subsidiary of KPMG Europe LLP and operates from 22 offices across the UK with nearly 11,000 partners and staff. The UK firm recorded a turnover of £1.6 billion in the year ended September 2010. KPMG is a global network of professional firms providing Audit, Tax, and Advisory services. We operate in 150 countries and have more than 138,000 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. KPMG International provides no client services.