Commenting on today’s Inflation Report, Tom Hooper, economist at KPMG, said:
“This is more bad news. It has become an unfortunate theme but another forecast brings another downgrade. The Bank of England has just reduced its projection for growth for both this year and next, and now expects inflation to stay higher for longer than previously thought.
“Policy makers have a long worry list - the economy has essentially been flat over the past couple of years and there seems little on the horizon to lift it. An uptick in price rises means the household sector is unlikely to see real wage growth anytime soon, austerity measures have a long way to go and Europe, our main export market is stagnating at best.
“This combination of weak underlying growth and elevated inflation confronts the Monetary Policy Committee with a dilemma – but if the Banks forecasts are right, CPI will fall back to target over the next couple of years. With this in mind, and given the gloomy overall picture the door still remains open for further monetary stimulus in the New Year.”
Mark Hamilton, KPMG Press Office
020 7694 2687 (t), 07785 337672 (m) or firstname.lastname@example.org
Notes to Editors:
KPMG LLP, a UK limited liability partnership, is a subsidiary of KPMG Europe LLP and operates from 22 offices across the UK with over 11,000 partners and staff. The UK firm recorded a turnover of £1.7 billion in the year ended September 2011. KPMG is a global network of professional firms providing Audit, Tax, and Advisory services. We operate in 152 countries and have 145,000 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.