In our post Forget UK! we have indicated the reasons why we believe it is unsafe investing in UK asset classes now. A reminder of negative UK economic outlook came today from a Telegraph article that reported words from Kornelius Purps, Unicredit 's fixed income director. He said "I am becoming convinced that Great Britain is the next country that is going to be pummelled by investors". He also said "Britain's AAA-rating is highly at risk. The budget deficit is huge at 13pc of GDP and investors are not happy. The outgoing government is inactive due to the election. There will have to be absolute cuts in public salaries or pay, but nobody is talking about that," and "Sterling is going to fall further over coming months. I am not expecting a crash of the gilts market but we may see a further rise in spreads of 30 to 50 basis points".
These words strenghten our negative view on UK...
For the entire article look here: http://www.telegraph.co.uk/finance/economics/7423138/Europes-banks-brace-for-UK-debt-crisis.html
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