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Bank Of England News Markets Slow As UK Growth Forecast Is Downgraded 18471156


Markets slow as UK growth forecast is downgraded

Markets slow as UK growth forecast is downgraded

11 August 2010 / by Lois Avery

Investors will be bracing themselves for more tough times after the Bank of England announced today that it will be downgrading its growth forecast.

It now forecasts growth in the UK economy of 2.5 per cent in 2011, down from its previous estimate of 3.4 per cent and inflation is expected to remain high well into 2011.

Bank of England governor Mervyn King delivered his forecast today and warned that Britain is facing a ‘choppy’ recovery.

He said: “Banks are not being awkward or bloody minded in their attitude, they are facing higher costs of funding… it is not a question of blaming people, this is a direct consequence of the financial crisis that occurred.”

The news weighed heavy on the markets overnight with the FTSE 100 1.4 per cent down and sterling falling to a one week low against the dollar.

Despite recent figures suggesting that the UK economy was coming out of recession he Bank’s report said that confidence had fallen since May, when the growth forecast was upgraded.

“It will take many years before bank balance sheets and fiscal positions return to anything like normal.

“That is clearly a significant improvement upon last year, and somewhat stronger than expected in May and the tailwinds will continue to support growth.

“But there are clearly risks: business and consumer sentiment have shown signs of softening, measures of financial fragility remain elevated, and there is great uncertainty about the outlook for both the United States and our most important trading partner, the euro area.”

The downgrading follows warnings from the U.S. Federal Reserve that the pace of economic recovery is slowing – raising fears about a double dip recession.

© Fair Investment Company Ltd



  Product Name ISA Option Income Yield More Info
Investec FTSE 100 Income Deposit Plan

3.50%

per annum

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6 year capital protected deposit plan paying a potential income of 3.50% annually or 0.28% monthly. Also available for Cash ISA and Cash ISA transfer.
Income Maximiser
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Seeks to achieve a target yield of 7% to generate a quarterly income, whilst offering the potential for some long-term capital growth. Save 100% on Initial Charges.
Monthly Income Plus Fund
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Popular monthly income fund that aims to achieve a high level of income whilst seeking to maximise total return through investing in high yielding corporate and Government bonds, together with UK equities. 100% discount on initial charges.
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Strategic Bond
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Investing in higher yielding assets which will include most types of fixed interest securities, this fund aims to deliver a quarterly income to investors. Save up to 97% on Initial Charges.
Invesco Perpetual Corporate Bond Fund
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This highly popular investment fund aims to achieve a high level of overall return with relative security to capital. Income Paid to you twice yearly. Up to a 100% Discount off the Standard Initial Fund Charge.
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Artemis Income Fund
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One of the leading UK Equity Income Funds. The Fund managers hunt out companies with strong free cash flow and solid balance sheets. Income is paid to you twice yearly. 100% Discount off the Standard Initial Fund Charge.
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Invesco Perpetual High Income Fund
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One of the UK’s most popular income funds, the Invesco Perpetual High Income has delivered consistently good long term returns through a variety of market conditions. Income is paid to you twice yearly. Up to a 100% Discount off the Standard Initial Fund Charge.
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M&G; Corporate Bond Fund
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The M&G; Corporate Bond Fund is a conservative ‘blue chip’ sterling fund that aims to produce a higher return than UK government bonds. Income is Paid to you Quarterly. 100% Discount off the Standard Initial Fund Charge.
Jupiter Merlin Income Portfolio
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The Jupiter Merlin Income Portfolio fund aims to achieve a high and rising income with some potential for capital growth. Income Distributions are made to you quarterly. 95% Discount off the Standard Initial Charge.
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The value of investments and any return from them can fall as well as rise and you may not get back the full amount invested. Please ensure that you read the Important Risk Information below.
  Product Name ISA Option Maximum Potential Return Term More Info
FTSE 100 Enhanced Kick Out Plan

10%

per annum

Up to
6 years
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Structured investment plan with the potential to mature after years 1, 2, 3, 4, 5 or 6. If the plan matures early it will return 10% times the number of years the plan has been in force. Also available for Stocks & Shares ISA and ISA transfer.
FTSE 100 Kick Out Deposit Plan

6%

per annum

Up to
6 years
More Info >
Capital protected deposit plan with the potential to mature after years 3, 4, 5 and 6. If the plan matures early it will return 5% times the number of years the plan has been in force. Also available for Cash ISA and ISA transfer.

The value of investments and any return from them can fall as well as rise and you may not get back the full amount invested. Please ensure that you read the Important Risk Information below.
  Service ISA Option Minimum Investment More Info
Share Trading Account Plus
N/A
More Info >
Trade in a wide variety of investment options including International Equities, Warrants and Covered Warrants. Frequent traders get a reduced rate of £8.95

The value of investments and any return from them can fall as well as rise and you may not get back the full amount invested. Please ensure that you read the Important Risk Information below.

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