Global recovery intact despite weaker US

Worse-than-expected economic data from the US last week reignited fears of a double-dip recession, but managers are cautiously optimistic the economy will remain supportive of global growth.

The latest labour market data shows new claims for jobless benefits have hit half a million, a nine-month high. Meanwhile, the Federal Reserve Bank of Philadelphia reported an unexpected fall in its manufacturing index from 5.1 in July to -7.7 in August, a worrying sign for one of the strongest sectors of the US market. These disappointing numbers were no surprise, says James Harries, the manager of the £1.17bn Newton Global Higher Income fund. “We think a cautious view is warranted, and have thought for some time that the more optimistic expectations on the marketplace were likely to be...