Fund Managers Call On Government To Announce Fiscal Spending Plans

Investment in infrastructure, technology and housing construction could help boost economy and stabilise pound, says leading investment house

Karen Kwok 13 October, 2016 | 2:22PM

The Government needs to step up its fiscal spending commitments if it wants to stabilise sterling and reduce the UK’s debt levels, according to Royal London Asset Management. The company said it hoped to see decisive action on this when Chancellor Philip Hammond delivers his Autumn Statement on November 23.

“As there is a clear headwind coming from Brexit fiscal policy has to step in to increase spending,” Trevor Greetham, head of multi-asset for Royal London Asset Management, said in a media roundtable event in London yesterday.

Sterling will be the first beneficiary out of a fiscal boost. The UK currency has fallen significantly against both the dollar and the euro, since the EU Referendum vote. It slid to record lows after the Prime Minister Theresa May confirmed the Brexit timetable. But Greetham argued that the UK part of the reason for sterling’s decline was the market perception that monetary policy is doing all the work to stimulate the economy.

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About Author

Karen Kwok

Karen Kwok  is a Reporter for Morningstar.co.uk

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