KPMG UK has offered commentary on economic and regulatory updates, reflecting the firm’s engagement with the UK’s financial landscape.
Drawing from its experience in financial services, KPMG’s professionals have analyzed the Bank of England’s (BoE) Q2 Credit Conditions Survey, Money and Credit data, inflation figures, interest rate decisions, the Financial Conduct Authority’s (FCA) proposals for a targeted support regime, and the UK’s industrial strategy.
These insights provide a perspective on the challenges and opportunities facing households, businesses, and policymakers.
Starting with the BoE’s Q2 Credit Conditions Survey, Karim Haji, Global and UK Head of Financial Services at KPMG, highlighted stable consumer demand for credit, particularly in credit cards and remortgaging, amid persistent cost pressures.
He noted that while default rates remained steady, with credit card defaults even improving early in the quarter, an increase in repossessions signals underlying financial strain for some households.
Haji emphasized cautious optimism for the second half of 2025 but urged lenders to stay vigilant about affordability and borrower behavior, reflecting the delicate balance in the current economic environment.
Turning to the BoE’s Money and Credit data for May, released in June 2025, Haji commented on the pressures facing households.
The data revealed a sharp rise in borrowing, driven by challenges in stretching disposable incomes amid rising inflation and costs for transport, energy, and food.
This trend, coupled with a drop in consumer confidence, underscores the financial difficulties many UK households face.
Haji stressed the importance of lenders providing robust support, particularly in debt and budget management, as affordability remains stretched in a high-rate environment with elevated house prices.
Inflation, a persistent concern, was addressed in KPMG’s commentary on June 2025 figures.
The firm noted that while headline inflation had recently eased, volatile oil and gas prices, exacerbated by geopolitical tensions, could reverse this trend.
This volatility is likely to increase household energy bills, adding further pressure on finances.
KPMG’s analysis suggests that lenders must remain proactive in supporting customers, as default rates, though currently stable, could rise in the face of renewed inflationary challenges.
On monetary policy, KPMG commented on the BoE’s June 2025 interest rate decision, which maintained rates amid ongoing economic uncertainty.
The firm highlighted the delicate balancing act the BoE faces, as rising mortgage costs and a challenging economic outlook dampen demand, particularly among first-time buyers.
This cautious stance reflects the BoE’s efforts to manage inflation while supporting economic stability, with KPMG noting the potential for further rate adjustments to influence borrowing behavior.
In the regulatory sphere, KPMG responded to the FCA’s proposals for a targeted support regime, published in June 2025.
Daniel Barry, KPMG UK’s wealth and asset management risk and regulation lead, described the proposals as potentially transformational.
The detailed rules and guidance could enable firms to proactively assist customers with financial choices, leading to better outcomes.
However, Barry emphasized the need for firms to prepare strategically, addressing risks and ensuring conduct considerations are embedded from the outset.
This forward-looking approach underscores KPMG’s commitment to helping clients navigate complex regulatory changes.
Finally, KPMG’s commentary on the UK’s industrial strategy highlighted its potential to drive economic growth.
The firm stressed the need for a comprehensive strategy that supports all sectors, not just key industries, to address productivity gaps and skill shortages.
By leveraging technology and better management, businesses can overcome these challenges, with recruitment firms playing a pivotal role.
KPMG’s insights align with its broader mission to foster innovation and resilience across the UK economy.
KPMG’s analyses reflect its role as a trusted advisor, offering practical insights to navigate a complex economic and regulatory landscape.
With a revenue of £2.99 billion in 2024 and a workforce of approximately 17,000, KPMG continues to shape the UK’s financial and business environment through its multidisciplinary approach.