The UK could be pushed into a recession as runaway inflation threatens to all but wipe out economic growth.
KPMG has become the latest organisation to sound the alarm, saying there was roughly a 50pc chance of Britain being tipped into a “mild recession”.
It warned the UK was particularly vulnerable to a downturn if a cut-off of Russian gas supplies caused a contraction in the eurozone economy, or if aggressive interest rate rises in the US sparked a recession there.
KPMG forecast that the UK economy will slow to 3.2pc this year from 7.1pc in 2021, before almost grinding to a halt at 0.7pc next year.
5 things to start your day
1) World is on ‘tipping point’ of permanently high prices Inflation risks becoming embedded in leading economies and difficult to control, Bank for International Settlements warns
2) French energy giants tell households to ration supplies ahead of looming winter shortage Households asked to ‘immediately’ limit energy consumption to preserve gas reserves
3) Jaguar Land Rover’s battle to stop dealers selling in China The car maker has strict rules for its dealers wanting a piece of the highly lucrative market
4) Train operators hit back at RMT assault on “fat cat rail bosses” Rail chiefs say annual profits average a third of what Mick Lynch claimed
5) Thousands of PwC staff to get inflation-matching pay rise PwC boosts pay to help attract staff amid warnings of wage increases fuelling inflation
What happened overnight
Asian markets rallied again this morning, building on last week’s advances and following a strong performance on Wall Street as speculation that inflation may have peaked tempered expectations about central bank interest rate hikes.
Hong Kong climbed more than 2pc thanks to a strong performance in Chinese tech firms. Indications that China’s crackdown on the sector could be coming to an end added to the upbeat mood in the city.
Tokyo, Shanghai, Seoul, Singapore, Sydney, Manila and Wellington were also well up.
Coming up today
Corporate: No scheduled updates
Economics: Durable goods orders, non-defence capital goods orders, pending home sales (US)