Higher stock market volatility on the horizon

UK Markets forum

Repercussions of sub-prime shakeout will have long-term impact on US economy with Europe to outpace it by 5%

Société Générale's Michala Marcussen has forecast higher financial market volatility and lower asset class correlation for world markets. Speaking at Investment Week's UK Markets Forum, Marcussen, the group's head of strategy and economic research, said she is positive on Europe and Asia but sees the US economic recovery as only temporary. "Sub-prime lending has grown rapidly in recent years, from 3% of total outstanding mortgage loans in 2002, to 15% in 2007," she said. "The repercussions of America's sub-prime shakeout will have a long-term effect on the US economy. The housing market ...