KPMG UK, a prominent player in financial services, has delved deep into the recent economic and regulatory developments in the United Kingdom. With a keen eye on various facets of the financial landscape, KPMG’s experts have provided valuable perspectives on crucial aspects such as credit conditions, borrowing trends, inflation, interest rates, regulatory proposals, and industrial strategies.
Let’s take a closer look at the insights shared by KPMG professionals that shed light on the challenges and opportunities confronting households, businesses, and policymakers alike.
The analysis kicks off with an examination of the Bank of England’s Q2 Credit Conditions Survey. Karim Haji, Global and UK Head of Financial Services at KPMG, underscores the stability in consumer demand for credit during this period. Haji notes that while default rates have held steady and even improved in certain areas like credit cards early in the quarter, an uptick in repossessions hints at underlying financial stress among some households. Expressing cautious optimism for the latter part of 2025, Haji stresses the importance for lenders to remain vigilant about affordability metrics amid evolving borrower behaviors.
Moving on to Money and Credit data released by the BoE for May 2025 reveals a surge in borrowing driven by household pressures stemming from rising costs across various essentials like transportation, energy, and food. This spike in borrowing combined with a decline in consumer confidence paints a challenging picture for many UK households. Haji emphasizes that robust support from lenders is crucial especially concerning debt management given stretched affordability levels amidst soaring house prices.
In addressing inflation concerns based on June 2025 figures, KPMG highlights potential risks posed by volatile oil and gas prices influenced by geopolitical tensions which could potentially reverse any recent easing trends seen in headline inflation numbers. The looming threat of increased household energy bills adds further strain to consumers’ finances necessitating proactive customer support measures from lenders to mitigate potential default risks.
Turning towards monetary policy matters around BoE’s interest rate decisions for June 2025 reflecting prevailing economic uncertainties where maintaining rates was deemed necessary amid fragile economic outlooks notably impacting first-time homebuyers due to escalating mortgage costs. This prudent approach aims to strike a balance between managing inflationary pressures while fostering economic stability prompting considerations for future rate adjustments to influence borrowing patterns effectively.
Shifting focus to regulatory landscapes touched upon through FCA’s proposed targeted support regime unveiled in June 2025 garnering attention from Daniel Barry – KPMG UK’s wealth & asset management risk & regulation lead who views these proposals as transformative offering firms an opportunity to actively guide customers towards favorable financial outcomes through detailed rules enforcement emphasizing strategic preparedness encompassing risk mitigation strategies embedding conduct considerations proactively aiding clients navigate intricate regulatory transformations seamlessly.
Lastly exploring implications of UK’s industrial strategy emphasized by KPMG underlining its pivotal role driving economic growth stressing need comprehensive strategies supporting all sectors not limited to key industries bridging productivity gaps tackling skill shortages advocating tech infusion better management practices empowering businesses surmount challenges recruiting agencies pivotal aiding workforce upskilling initiatives aligning with broader mission nurturing innovation resilience invigorating UK economy vibrancy steering clients adeptly through multifaceted economic regulatory terrains marking its stature trusted advisor delivering pragmatic insights influencing sustainable progressions shaping dynamic business environments fostering inclusive growth trajectories benefiting diverse stakeholders propelling holistic development ushering brighter future horizons rich opportunities unveiling across varied sectors encapsulating ethos commitment excellence weaving resilient fabric economies ensuring prosperity continuity sustained evolution envisions promising tomorrow shaped collective wisdom foresight partnerships enduring collaborations building prosperous societies thriving cohesively fostering synergistic ecosystems champion transformations…
Leave feedback about this