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Keep your head: Most managers do not believe in double-dip

Keep your head: Most managers do not believe in double-dip

With all the extreme voices out there its often hard to keep perspective and ask fundamentally what the consensus is.

For what its worth the conensus among UK equity managers is that a double-dip recession is actually pretty unlikely.

the UK’s leading fund managers are now dismissing the chances of the economy sliding into a double-dip recession and are growing increasingly bullish.

Artemis’s Adrian FrostMark Lyttleton from BlackRock and Schroders’ head of UK equities Richard Buxton, who between them run over £7 billion of retail money, all say growth will be stronger than expected.

Frost, who oversees the £3.2 billion Artemis Income fund, said: ‘I don’t think the UK will experience a double dip. Confidence in this view is middling but to date the economy is proving to be more robust than feared.

‘Although the government cuts will in time put pressure on growth, the environment of rock bottom borrowing costs will continue and I believe this will ensure a much talked about double dip is avoided.’

Similarly, Mark Lyttleton, who runs the £2 billion BlackRock UK Absolute Alpha fund, believes the risk of a double dip is ‘low’ and he expects the global economy to pull through by ‘chugging along’.

‘For the UK in particular, I expect low levels of economic activity but the likelihood of a return to deep recession conditions is low,’ he said.

By far and away the most bullish, however, is Richard Buxton, manager of the £2 billion Schroder UK Alpha Plus fund.

Although he expects the market to be rangebound for the remainder of the year, he predicts it will surge by 20% in 2011.

‘The consensus is that the UK and US will roll over into a double dip. There are concerns over the VAT rise and public sector job losses and the consensus is that it will be dreadful,’ Buxton says.

‘I expect us to muddle through with sluggish growth but I certainly don’t see the UK in negative territory. Given that equities are at very attractive valuations, I would expect the FTSE to gain 20% in 2011.’

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