View more on these topics

Economists rain on positive OECD UK results

Economists have played down the Organisation of Economic Co-Operation and Development’s glowing report on the future of the UK economy.

The OECD’s leading indicator for the UK, which is calculated by assessing the performance of the FTSE non-financial index, three-month interest rates, production forecasts, economic confidence meters and car sales, rose to its highest level since 1973. The UK indicator rose to 105.9 in December 2009, up 11.5 points on November.

This is one of the highest points for the indicator in 40 years, which has historically been successful in predicting GDP movement.

But Simon Johnson, a former director of the International Monetary Fund, says investors will soon look unfavourably on gilts as fears surrounding the UK’s growing debt problem materialise in the markets.

Johnson says: “Worries about government debt and associated public sector liabilities because banking systems are in deep trouble, have spread through the Eurozone to Spain and Portugal. Ireland and Italy are next up for hostile reconsideration by the markets, and the UK may not be far behind.”

Charles Stanley director of private client research Jeremy Batstone-Carr says the positive OECD data may be an anomaly. He says a sluggish 2010 housing market, coupled with an end to the bull market and weak Sterling means it is unlikely that GDP will pick up as quickly as the OECD data might suggest.

He says: “The strong suspicion is that the leading indicator is about to ‘roll over’. The year has started with the euro under pressure in the wake of mounting concerns regarding sovereign debt levels in Greece and rising concerns regarding Spain amongst other peripheral Eurozone countries.

“Sterling may struggle, particularly if the election result delivers a hung parliament and policy paralysis. Were prevailing themes to be maintained though, it clearly augurs in favour of buying UK based companies with greater US exposure to those with greater European exposure. Pass the ouzo…and a revolver!”


£630M aim for Bolton China fund

Fidelity plans an initial capital-raising of £630m for Anthony Bolton’s China special situations investment trust. The public offer opens on February 26 and closes on April 5, with admission to the London Stock Exchange and dealing to start on April 19. Minimum investment is £2,500 and is only be available for lump sum investments. Ann- […]

Low markets see Standard Sipp transfer values suffer

Standard Life Sipp business fell by 21 per cent to £2.9bn last year from £3.7bn in 2008 while net inflows dropped by 28 per cent to £1.8bn. Lower average market levels over the year hit incoming transfer values, which it says continue to represent the majority of new business. Sipp assets under administration rose by […]


Olympic claim

It is the nature of things that those placed in charge seek to be seen to make a difference. Of course, a difference is not necessarily an improvement and it is also true that when governments and their appointed quangos decide to effect changes, these have a remarkably consistent habit of rebounding and creating an […]


News and expert analysis straight to your inbox

Sign up


    Leave a comment


    Why register with Money Marketing ?

    Providing trusted insight for professional advisers.  Since 1985 Money Marketing has helped promote and analyse the financial adviser community in the UK and continues to be the trusted industry brand for independent insight and advice.

    News & analysis delivered directly to your inbox
    Register today to receive our range of news alerts including daily and weekly briefings

    Money Marketing Events
    Be the first to hear about our industry leading conferences, awards, roundtables and more.

    Research and insight
    Take part in and see the results of Money Marketing's flagship investigations into industry trends.

    Have your say
    Only registered users can post comments. As the voice of the adviser community, our content generates robust debate. Sign up today and make your voice heard.

    Register now

    Having problems?

    Contact us on +44 (0)20 7292 3712

    Lines are open Monday to Friday 9:00am -5.00pm