Articles - We are able to avoid double dip recession


Majority of discretionary managers say we will avoid double dip recession

 Almost two thirds (63%) of discretionary asset managers polled at Schroders London Investment Conference last week, believe we will not experience a double dip recession.

 Meanwhile, 81% of the 170 discretionary managers said the Bank of England will increase interest rates in 2013, with15% believing interest rates will rise this year.

 Keith Wade, Chief Economist of Schroders said:

 "Raising interest rates in 2013 is in line with our thinking. We need to think very carefully about the interest rate environment because it is very different from what we have seen before. Interest rates are set to remain below inflation for a sustained period of time, meaning that investors will have to take risk to avoid losing money in real terms. Cash is no longer a risk free asset."

 Commenting on the corporate sector Keith Wade said:

 "We still feel that the corporate sector is in a good position to spend. Corporate profits in the UK, US, across Europe and Asia have recovered robustly. If you look at the earnings numbers from the company reports, they have improved significantly. At the moment money is accumulating on the balance sheet. Business confidence has been hit by the crisis, but this does not seem to have fed through into weaker spending. Again, the picture for the UK is very similar.

 "Growth will be subdued, but despite the reports, we do not see a double dip recession in the UK or elsewhere."

 On responding to whether the Euro will remain intact with its current members by 2015, 63% of managers said the composition of the euro will change in the next four years, with 37% believing it will remain the same.

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