By Andrew Smith, Chief Economist, KPMG in the UK

In his swansong, the outgoing Governor of the Bank of England, Mervyn King produced something of a rarity – good news. In May’s Inflation Report growth forecasts were revised up, rather than down, for the first time since 2008 and the outlook for inflation improved too. The Bank now expects GDP to rise by 1.1% this year (up from 0.9%) and for CPI to peak at 3.1% rather than 3.2%. Small changes maybe, but alongside a stronger than expected first quarter are these the promised green shoots, or will they prove just another false dawn?

By Andrew Smith, Chief Economist

The price of oil has hit a new high in sterling terms and, where oil goes, petrol follows. In recent days pump prices have touched record levels – piling more pressure onto already stretched households. The economic recovery has been weak so far – will rising oil prices derail it completely?

By Andrew Smith, Chief Economist, KPMG in the UK

Almost two years ago, the Monetary Policy Committee took an unprecedented step and cut interest rates to 0.5%, at the same time unleashing a multi-billion pound programme of asset purchases – known (simply!) as quantitative easing (QE) – to support the economy. Since then, GDP growth and inflation have moved erratically and output remains 4% below its pre-recession peak. This week, I was struck by how calmly the announcement of a further round of QE and continuing ultra-low rates was reported. It’s almost like this is the norm – but it’s not normal. These are desperate measures in extraordinary times.  It is worth considering how we got here, and does QE really help?