Stocks to watch amid projections of economic contraction in UK

Highlights

• The UK economy may shrink by 1.3% next year, KPMG has said.
• Prior to the estimated 0.2% recovery in 2024, the company anticipates an overall investment contraction of 0.7% next year.
• A greater number of firms would be pushed towards insolvency as the economy keeps weakening, as per KPMG.

Inflation hitting the roof and interest rate hikes have given rise to the anticipations of economic contraction in the UK. According to a recent forecast by accounting firm KPMG, the UK economy is projected to contract by 1.3% in 2023.

On Monday, the organisation claimed that next year, the country will face a slight but prolonged recession. However, following this, some degree of revival would potentially be witnessed in 2024, with the gross domestic product going up by 0.2%.

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In its yearly UK Economic Outlook, the accounting firm stressed that the margins and investment of companies would be negatively impacted by the rocketing rates and escalating geopolitical tensions.

Prior to the estimated 0.2% recovery in 2024, KPMG anticipates an overall investment contraction of 0.7% next year. It also added that a greater number of firms would be pushed towards insolvency as the economy keeps weakening.