Having benefitted more from a defensive posture relative to the rest of Europe in 2011, the UK now stands to potentially offer somewhat greater growth potential for investors in 2012.
Forecasts show a higher predicted growth rate for the UK., +0.7% vs. -0.8% for Europe based on several factors. The Bank of England has been more aggressive than the European Central Bank to support economic growth, having completed two rounds of quantitative easing with a third round expected in 2012. Bond yields and interest rates are at historic lows. In addition, inflation is expected to moderate in 2012. The rate fell from 4.8% in November to 4.2% last month. The UK equity market is international by its nature, with 75% of FTSE 100 companies’ sales derived from outside the UK, a...
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