Woodford: UK could follow Europe into recession next year

Neil Woodford has revealed his "increasing concern" about the situation in the eurozone as he warns of a European credit crunch and the risk of the UK following Europe into recession next year.

The Invesco Perpetual manager responsible for the £10.5bn High Income and £8.3bn Income funds, who rarely makes huge macro calls, said a "messy Greek default and exit from the euro" are still a probability despite politicians' efforts to come up with a package to solve the debt crisis. He said the package was "substantially short" of what he hoped for it and has triggered a reaction across European banks in terms of capital raising. "I believe the process of European bank de-leveraging has started now in earnest which means a credit contraction - the sort of thing we saw in Japan, the...