KPMG, the professional services firm, is forecasting a recovery in the UK initial public offering (IPO) market next year after 2003 was the quietest for a decade.

Neil Austin, head of new issues at KPMG corporate finance said: "The indications are that the investor base will be receptive to good quality companies coming to market - the issue is supply and we therefore do not expect to see a flood of new entrants. It is likely that exits by private equity players will drive any upturn in deal volumes over the coming months."