KPMG – UK Economic Outlook, Apr 2025

The main theme of the report concerns the economic forecast for the United Kingdom in 2025.

Key findings include an unfavorable trading environment and increasing tax burden posing risks to the UK's economic growth. Inflation is expected to peak at 3.6% by autumn 2025 before returning to the Bank of England's target level of 2% by mid-2026. Interest rates will remain above the neutral level, with several planned reductions in 2025 and 2026. Rising labor costs and weak business sentiment may lead to easing wage pressures, while unemployment levels may only slightly increase. The Chancellor faces the challenge of adhering to fiscal rules while advancing the growth agenda.