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The UK is at high risk of a serious economic downturn next year, one of the world’s biggest active bond fund managers has warned.
Daniel Ivascyn, chief investment officer at Pimco, told the Financial Times that he has been running larger than usual bets on UK government bonds relative to those from the US, in anticipation that the UK will suffer greater economic strain.
“In the case of the UK — a smaller, open economy, with a consumer that’s feeling the brunt of central bank policy far more than their US counterparts — you just have a higher probability of more significant economic deterioration.
“We do think there’s potentially more hard landing risks.”
The UK economy unexpectedly shrank in October, contracting 0.3 per cent after a 0.2 per cent expansion in the previous month, according to data last…
