St. James's Place News
Bank of England downgrades forecast for UK growth
On the fifth anniversary of the start of the global credit crisis, the Bank of England's latest Inflation Report significantly downgraded its forecasts for economic growth for the rest of 2012 and 2013. With the UK already firmly mired in a double-dip recession, the Bank said it now expects growth to be flat for the rest of the year, with only a modest rise to 1.3% next year, down from 2% in the last report.
However, the economic data continues to confuse many commentators, with imports remaining steady and employment continuing to rise, suggesting that perhaps the gloom is overdone. This was reinforced by better-than-expected construction figures, indicating that the second-quarter GDP numbers may be revised upwards in the coming months, admittedly to a still disappointing -0.5%.
Also in this week's bulletin...
- Concerns over the eurozone were replaced by news that China's economy made a relatively sluggish start to the summer with growth slowing to an annualised 7.6% in the second quarter, its slowest pace since the height of the credit crisis.
- Whilst growth in China appears to be stalling, eyes were drawn to two global companies, Nestlé and Prudential, which are benefiting from increasing consumer demand in the emerging economies for Western brands.
- After reaching a peak of $1,922 per troy ounce in September, at the height of the Greek debt crisis, gold has fallen to $1,611 per ounce - despite improving over recent weeks - surprising many who viewed gold as a permanent safe haven.
View this week's Market Bulletin (PDF), which contains thoughts and opinions of St. James’s Place and our range of investment managers on the key issues affecting investors.
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