Fund managers predict 1-in-4 chance of a UK recession

 
Jessica Morris
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Government Announces That The UK Is Officially In Recession
Chancellor George Osborne recently warned he could make more spending cuts in his March Budget (Source: Getty)

Fund managers are feeling increasingly gloomy about the outlook for the UK economy, according to a new survey.

On average, they forecast a 23 per cent chance of a UK recession during the next eighteen months, according to investment bank and research house Liberum's UK SMID fund managers’ survey.

The survey also showed they're pessimistic on all fronts: with fund managers slashing expectations for returns, small and mid-cap companies outperformance, economic growth, upgrades and mergers and acquisitions activity.

Data released today showed factory growth fell to its lowest level in nearly three years last month. UK exporters have been struggling due to a strong pound and weak global demand. Chancellor George Osborne recently warned he could make more spending cuts in his March Budget against a darkening global economic backdrop.

"Respondents have generally called the market well since our survey began in 2011," the survey said.

"However, over the past two quarters fund managers appear to have been severely wrong-footed by markets. This quarter, we see a change of sentiment."

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