Bloomberg News

London Fund Managers Grow More Upbeat on Economy, Survey Shows

December 06, 2012

London Fund Managers Grow More Upbeat on Economy, Survey Shows

The increase in investor confidence in the U.K. economy contrasts with the gloomy assessment by the Bank of England last month, when Governor Mervyn King said previous BOE forecasts had been too optimistic and the recovery would be “protracted.” Photographer: Chris Ratcliffe/Bloomberg

London fund managers and analysts grew more confident in the outlook for the U.K. economy this quarter, reflecting optimism already seen in equity markets, a survey found.

Sixty-nine percent of the 200 investors and market analysts polled expect an improvement over the next 12 months, up from 44 percent in the third quarter, London-based Capital Spreads said today. Sixty-one percent see a “marginal” improvement, with just 8 percent forecasting a significant strengthening.

The benchmark Stoxx Europe 600 Index (SXXP) has surged 19 percent from this year’s low on June 4 as central banks boosted stimulus measures and as European Central Bank President Mario Draghi pledged to protect the single currency. The FTSE 100 Index has gained 12 percent in that period.

“There’s clearly renewed confidence about the U.K.’s economy,” said Angus Campbell, head of market analysis at Capital. “However, as we’ve seen from the past, this can turn on a sixpence, and if the markets start to head lower again we can expect to see confidence take a dive, too.”

The increase in investor confidence contrasts with the gloomy assessment by the Bank of England last month, when Governor Mervyn King said previous BOE forecasts had been too optimistic and the recovery would be “protracted.” The British Chambers of Commerce and the Office for Budget Responsibility both cut their projections for 2013 this week.

Of the respondents to the quarterly survey, 8 percent forecast that the economy will weaken. The poll was conducted by research company Populus from Oct. 15 to Oct. 22 for Capital Spreads, the spread-betting unit of London Capital Group Holdings Plc. (LCG)

To contact the reporter on this story: Fergal O’Brien in London at fobrien@bloomberg.net

To contact the editor responsible for this story: Craig Stirling at cstirling1@bloomberg.net


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