Wealth Manager - the site for professional investment managers

Register to get unlimited access to Citywire’s fund manager database. Registration is free and only takes a minute.

Legal & General IM: UK downgrade almost inevitable

Legal & General IM: UK downgrade almost inevitable

Legal & General Investment Management believes the UK's debt position means a ratings downgrade is inevitable.

Speaking after data showed unemployment hit a 17-year high in the UK, LGIM said it expects UK's top AAA-rating will be reviewed over the coming years as the government struggles to meet its forecasts.

According to the Daily Telegraph LGIM economist James Carrick said that while quantitative easing may help growth in the short term, over the longer term the economy still remains in trouble.

'Under all scenarios, we think the Chancellor will miss his projections,' Carrick said. 'We expect the debt-to-GDP ratio to remain on an explosive path no matter what the government does.'

He said only the 'biggest private sector boom' ever could prevent a downgrade to compensate for the largest fiscal squeeze since the WW II, a scenario he thinks is unlikely as the UK falls back into recession. 

'The private sector will have to grow not just at its fastest rate in one year, but for four in a row,' Carrick said.

He also highlighted the struggle banks will face in this climate. 'It's very difficult to get a boom when credit is restrained,' he said.

Leave a comment!

Please sign in or register to comment. It is free to register and only takes a minute or two.
Citywire TV
Play Wealth Manager Retreat 2017: size isn't everything

Wealth Manager Retreat 2017: size isn't everything

We asked our delegates at the Wealth Manager Retreat what they think about the recent wave of consolidation in the industry.

1 Comment Play CIO Tapes - part 3: 'passive funds are anti-capitalist'

CIO Tapes - part 3: 'passive funds are anti-capitalist'

Citywire recently gathered three of the UK's leading fund investment heads to discuss their hopes, fears and the issues that their jobs throw at them daily.

Play CIO Tapes: do investors have it as good as it gets?

CIO Tapes: do investors have it as good as it gets?

Citywire gathered three of the UK's leading fund investment heads to discuss what they fear and what makes them cheer about the year ahead

Read More
Your Business: Cover Star Club

Profile: from managing Brunei’s billions to Dorking’s pension pots

Profile: from managing Brunei’s billions to Dorking’s pension pots

Mole Valley Asset Management's boss on why he chucked in multi-billion mandates for Surrey wealth management

Wealth Manager on Twitter