Despite the latest rise in UK inflation to 10.4%, the headline rate is expected to fall in the next few months as last year’s energy price hikes drop out of the index.

Global headline inflation is expected to drop from 7.4% to 5.3% at the end of 2023, according to KPMG’s latest Global Economic Outlook report, as energy prices returned to levels last seen before the Russian invasion of Ukraine.

KPMG warned that major economies throughout the world – most recently the UK and US - are facing their own domestic pressures, delaying any hopes of improving market conditions and a drop in inflation.

Although the likelihood of a recession has fallen in the UK, growth is expected to be negative in 2023 on the back of a squeeze on household real incomes and the impact of interest rate rises.