Economists for KPMG said it had been an unexpectedly strong start to 2025 but the second half was looking more uncertain. The accountancy giant is forecasting UK gross domestic product (GDP) to rise by 1.2% over 2025 and 1.1% in 2026. Consumers are expected to remain cautious in relation to spending while uncertainty about trade policy continues to pose a risk to levels of business investment, according to its latest UK Economic Outlook report. This is likely to result in tax rises in the autumn Budget, rather than cutbacks to spending on public services, KPMG forecast. It is then forecasting another rate cuts during 2026, bringing the level down to 3.25% by the end of the year.