Legal & General Investment Management discuss whether the UK economy will recover earlier than other economies

Legal & General Investment Management discuss whether the UK economy will recover earlier than other economies

At today’s Fundamentals briefing, James Carrick, Economist at Legal & General Investment Management discussed the outlook for UK economic growth, commenting that since last spring, “We have remained far more pessimistic about the outlook for UK economic growth than other economists. But as the global backdrop has deteriorated, that gap has now closed. We now find ourselves slightly more optimistic than consensus about the prospects for the UK economy.”

James examined the drivers of the improvement in LGIM’s lead indicator. “The catalysts can be divided into approximately four equal components. These are: falling mortgage rates, a combination of lower energy prices and a weaker pound, improvements in household balance sheets and finally, an expected recovery in the global economy.”

James went on to highlight that consensus expects the UK economy to lag behind the US in 2010, “But on a relative basis, the UK could be one of the better performers given the greater flexibility of mortgage rates and the increased competitive advantage of the weaker pound.”

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