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The Budget has been a good opening salvo, but more may be needed

The Budget has been a good opening salvo, but more need

Karim Haji, Head of Financial Services, KPMG UK, comments on Banking measures and industry investment will provide much needed support for UK economy.

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Commenting on The Bank of England’s package of measures and the Chancellor’s Budget, Karim Haji, Head of Financial Services, KPMG UK says:

“Bold measures are needed to deal with recent shocks to the economy spurred by Covid-19. The Bank of England’s package of measures combined with the Chancellor’s tax breaks and investment commitments are a welcome opening salvo, that shows a determination to manage threats to the economy, but much more may be needed over time.

“We cannot underplay the challenge at hand here. A huge proportion of UK businesses face significant cashflow pressures and without cash firms can’t survive for long. Thanks to a decade of scrutiny around banks’ capital resilience and rigorous annual stress tests, the finance sector is in a good position to help but it won’t be a comfortable journey. Banks’ margins are already squeezed, asset managers are especially vulnerable to the current market situation and insurers face the potential double hit of increased claims and decreased portfolios. It is also worth noting that some of the real life market shocks we’re now seeing are more severe than several of those banks have been subjected to in regulatory stress tests.

“And finally, our finance sector and coronavirus are global whereas these measures aren’t, they may have proved more impactful as part of a coordinated global response.”



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Christina Bridge, KPMG Corporate Communications
07789 504905
Christina.Bridge@KPMG.co.uk

Olivia Shalofsky, KPMG Corporate Communications
+44 207 3112370
Olivia.Shalofsky@KPMG.co.uk

About KPMG

KPMG LLP, a UK limited liability partnership, operates from 22 offices across the UK with approximately 17,600 partners and staff. The UK firm recorded a revenue of £2.40 billion in the year ended 30 September 2019. KPMG is a global network of professional firms providing Audit, Tax, and Advisory services. It operates in 147 countries and territories and has more than 219,000 people working in member firms around the world. The independent member firms of the KPMG network are affiliated with KPMG International Cooperative ("KPMG International"), a Swiss entity. Each KPMG firm is a legally distinct and separate entity and describes itself as such.

© 2020 KPMG LLP, a UK limited liability partnership, and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative, a Swiss entity. All rights reserved.

KPMG International Cooperative (“KPMG International”) is a Swiss entity. Member firms of the KPMG network of independent firms are affiliated with KPMG International. KPMG International provides no client services. No member firm has any authority to obligate or bind KPMG International or any other member firm vis-à-vis third parties, nor does KPMG International have any such authority to obligate or bind any member firm.

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