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Woodford warns of UK credit rating peril

Invesco Perpetual fund manager Neil Woodford has warned there is a high probability of the UK losing its AAA credit rating if the Government does not address the budget deficit.

Speaking in a web conference for investors last week, Woodford said a downgrade by the rating agencies could have serious consequences, including downward pressure on sterling. He said: “A downgrade is more likely now than it has ever been, at least since we went cap in hand to the International Monetary Fund in 1976. There is a decent chance that we will be downgraded and this is a near certainty if we do not deal with the deficit.”

He said Britain has to “take its medicine” to avert a downgrade. “The consequences would be pretty tough as we would end up paying more for our borrowing, and there is the external perception of the economy.”

Woodford defended his funds’ performance in 2009.

He said: “I am confident we have the right strategy. We do not have the right ingredients for a sustainable economic recovery. We are in a period of economic stabilisation. We will not get a V-shaped recovery but we will not fall off a cliff.”

He said he expected to see dividend growth of 10 per cent this year. “The yield on the fund is currently 4.2 per cent, which is over 20 per cent higher than the yield on the stockmarket. I expect dividends to grow by upwards of 10 per cent this year.”



Will Virgin bank sell through brokers?

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FSA fines Northern Ireland mortgage firm £35,000

The FSA has fined a Northern Ireland mortgage firm £35,000 and banned one of its partners for failures which led to fraudulent applications. James Ian Shanks, a former partner and mortgage adviser at County Down mortgage intermediary Case Funding Centre, was banned for recklessly submitting false information to lenders. The FSA found CFC did not […]

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Healthcare predictions for 2015 from Jelf Employee Benefits

The continuing fall-out from the Competition and Markets Authority’s (CMA’s) review, the rise of the private GP and digital engagement will be the primary focuses in the private healthcare industry during 2015, according to Iain Laws, managing director, healthcare and group risk, at Jelf Employee Benefits.


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