DEAL-MAKING in the UK has fallen, a sign that the general global economic recovery has not filtered into the nations to the extent predicted, according to figures released today by KPMG Corporate Finance.

The analysis reveals that while the value of UK completed deals held up in the first half of 2004, the number was down 25% - falling from 1343 in the first six months of 2003 to 1001 so far this year.

The UK completed transact-ions with a total value of (pounds) 42bn in the six months of the year, compared with (pounds) 43.6bn of deals closed during the same period in 2003, the figures revealed.

Setting this in context, the combined value of world-wide activity remained level at $557bn ((pounds) 303.8bn) this half, while the number of com-

pleted deals on a global basis has dropped 10% so far in 2004, compared with last time.

However, the forward-looking analysis, based on announced deals this half, does suggest an improving picture world-wide with a 54% increase in the global value of announced activity on the first half of 2003.

Jeff Corray, head of KPMG corporate finance in Scotland, said: ''At the start of the year

a more stable economic landscape and a rebound in the equity markets held the promise of increased merger and acquisition activity (in the UK), but this has yet to fully materialise. While it is encouraging to see no further depreciation in the value of completed activity, the UK's sizeable drop in deal numbers is a telling sign that recovery is still a way off.''

Indeed, the UK pipeline looks much slimmer this half, with only a 5% rise in the value of announced deals and an 18% drop in announced bid numbers to 1117 compared to the first half of 2003.

Of these, 177 deals valued at around (pounds) 20.2bn are still awaiting completion. The largest pending UK transaction is the bid by Royal Bank of Scotland - led by recently-knighted Sir Fred Goodwin - for Charter One Financial in the US for $10bn ((pounds) 5.5bn).

Globally, the survey noted, a large proportion of expected upturn in the second half is accounted for by so-called headline deals - including Sanofi-Aventis for $74bn, JP Morgan Chase-Bank One for $58bn and Cingular-AT&T for $4bn - all yet to complete.

Corray added: ''A number of blockbuster deals hit the press in January, pointing to a more buoyant 2004 - but the pick-up did not filter down to the broader market. Many of the larger deals have yet to close.''