London Fund Managers More Optimistic About Economy, Survey Shows
London fund managers and analysts have become more confident in the U.K. economy after recent indicators signaled a strengthening recovery, a survey found.
Eighty-two percent of 200 investors and analysts polled expect the economy to improve over the next 12 months, up from 69 percent a year earlier, London-based Capital Spreads said today. The survey also showed that 62 percent view the recovery as sustainable and not built on an “artificial housing boom.”
The Bank of England said last week that the recovery is “taking hold” and increased its growth forecast for this quarter to 0.7 percent from 0.5 percent. The nine-member Monetary Policy Committee unanimously agreed at its meeting this month that the economy currently requires no more stimulus, and policy maker Ben Broadbent said yesterday recent data has been strong.
“Investors are beginning to see some light at the end of what has been a very long and jet-black tunnel,” said Nick Lewis, head of trading and market risk at Capital Spreads. “It remains to be seen whether this is more than a housing bubble, but the City seems cautiously optimistic.”
Government initiatives to boost mortgage availability have drawn criticism for potentially stoking the property market too much. A gauge of house prices by the Royal Institution of Chartered Surveyors rose to the highest in almost seven years in August.
In a sign that some investors remain cautious, 30 percent of those polled said the U.K. economy is a bubble based on a housing boom, though they expect it to grow for the foreseeable future.
Of the 200 respondents, 6 percent forecast that the economy will weaken over the coming 12 months, down from 8 percent a year earlier. The poll was conducted by Populus from Sept. 3 to Sept. 10 for Capital Spreads, the spread-betting unit of London Capital Group Holdings Plc. (LCG)
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