Fund managers expect economy to grow but warn of sluggish progress

Julian Harris
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ALMOST two thirds (63 per cent) of fund managers believe the UK economy will grow over the next 12 months, a survey revealed today.

However, a majority of fund managers (54 per cent) expect the economy to only “marginally” improve, as sluggish growth looks likely to stall the recovery.

Faith in sterling nonetheless remains strong, with almost half (44 per cent) expecting the currency to appreciate over the coming 12 months. Only 28 per cent anticipate further depreciation of the currency.

The euro, however, is set to depreciate, according to 63 per cent of respondents. The 17 country single currency has recently strengthened, with the European Central Bank expected to hike interest rates on Thursday.

But the expectation of depreciation to come “highlights further uncertainty about Europe’s economic security,” according to the report by Capital Spreads.

“Although sterling is currently trading at roughly a four month low against the euro, fund managers appear to be of the opinion that it is only a matter of time before it strengthens,” said Capital Spreads chief Simon Denham.